An avalanche of new work – and snow – has been blamed for BGP's latest results going off-piste. In the year to 31 May 2011, turnover at parent Goodhead Group grew 3.2% to £68.5m, while pre-tax losses reduced by 22.5% to £9.7m. The vast majority of the loss came from BGP, which posted an £8.7m pre-tax loss on sales up 4.7% to £57.6m.
Chief executive David Holland told PrintWeek that expected progress at BGP had been delayed by around 12 months, due to snow-based disruption just as the firm had taken on a number of large new contracts.
"Last Christmas you couldn’t get a lorry from south of Birmingham on the M40 and the A41 was closed for days at a time because of the snow," he said. "It cost us £1.5m and took us until March to get out of it."
This time last year, Holland predicted the company would be back in the black on a consistent basis by the beginning of 2011, and would be unlikely to require additional funding from owner Sir John Madejski.
Although operating losses at BGP were reduced by 16.4% to £6.5m, Madejski still had to inject a further £3.4m and converted an additional £3.9m liability into a loan. The shareholders’ deficit on Goodhead’s balance sheet grew by 36% to £32.2m.
Despite the setback, Holland remained upbeat about the company’s prospects and said the group still had Madejski’s full support. "We didn’t do all the things we said we would do," he admitted. "But breakeven is anticipated in the current quarter. We are getting out of these horrendous numbers."
Restructuring and redundancies have reduced the group’s cost base by £4m, and it continues to trim costs. Of this, Holland said: "When we’re making EBITDA of £10m in a couple of years, the company will be worth ten times that."Goodhead’s results are currently improving and only Goodhead is investing."
Sir John Madejski sold his controlling interest in Malaysian Autotrader earlier this year, netting £18m in the process. He has also bought out the £17m debt owed to Lloyds Banking Group by another of his interests, Clearview Traffic, at a discount that has not been disclosed.
