Durkan has marked a third year in the doldrums with a pre-tax loss of £8.3m, after being forced to make redundancies in its struggling contracting division.
This year’s shortfall follows losses of £3.9m last year and £9.3m the year before.
Turnover shrank from £170m to £138m, according to the firm’s annual report and financial statements for the year ending 30 November 2024.
The Hertfordshire-based company, which featured in last year’s CN100 index, said it had been obliged to cut jobs in its design and build arm in the wake of “a slowdown in customer demand”.
It also made provision for fire safety remediation costs of £14.8m, of which it expected to recover £6.3m through insurance.
“An uncertain legislative environment, including delays in obtaining regulatory sign-offs under the Building Safety Act, and a consequential slowdown in customer demand as housing associations and local authorities focus on their existing housing stock, has required the directors to assess the commercial risks of its design and build contracting business,” it said in a strategic report accompanying the accounts.
“Accordingly, the company is focusing on developing the regen business going forward, and whilst every effort is made to redeploy staff across the Durkan Group, there have been redundancies in contracting as projects complete and the division reduces in size.”
The redundancy costs, together with those of potential remediation work, were outside the ordinary business of the company and had therefore been presented separately as exceptional, it said.
Durkan Group executive chairman Danny Durkan said that despite these costs, the firm’s balance sheet was strong, boosted by the growth of both its housebuilding and recently rebranded regeneration arms.
“This financial position ensures we can continue to invest in our land pipeline to increase scale, as well as manage ongoing business risks,” he said.
“Like many of our peers, Durkan has been impacted by the cost of remediation work – activity we take very seriously and are committed to delivering.”
The underlying health of the business was nevertheless good, Durkan said.
“We expect to see this continue and improve year on year, driven by both the Durkan Homes and Durkan Regen businesses,” he said.
“We continue to focus on investing in our people, and in retaining the high levels of service and quality our customers and clients have come to expect.”