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Newport timber company optimistic despite turnover and profits fall
[Feb 28, 2024]

A Newport-based timber company has reported a "good and solid set of trading results" despite turnover and pre-tax profit dipping, with it eyeing a pipeline of acquisitions and an "exciting" future.

Established in 1993, Premier Forest Products is involved in the importation, distribution, saw milling and wholesale processing of timber and timber products.

Newly filed accounts for the year to 30 April 2023 show Premier Forest UK Group Holdings Ltd posted turnover of £106.2m, a drop from £139.4m. Pre-tax profit fell to £5.4m from £23.6m.

Terry Edgell, group chief executive, said: "We are pleased to report what we perceive as a good and solid set of trading results, despite a backdrop of significant economic difficulties, increased costs, product price deflation and softened demand.

Edgell noted the fall in turnover was "entirely expected".

He said the previous financial year came during a time of "unprecedented" global demand and product shortage, where "rampant" price inflation drove significant turnover increases across the entire industry. He said the accounting period was also extended to 14 months due to the capital demerger and sale of its Irish Group holding in 2021.

"This last year then witnessed an inevitable normalisation of timber prices across the entire market spectrum, but whilst we¡¯re certainly not immune to that effect, Premier Forest¡¯s ability to respond swiftly to changing market conditions and take advantages of the opportunities they create has left us this year in the strongest cash position in the company¡¯s history," he said.

"That in turn has meant we have been able to embark on a period of significant investment, with £2.9m spent on capital investment and additional staff."

Edgell said the company had entered an "accelerated" period of strategic company acquisitions, including Monmouthshire Timber Supplies ltd in South Wales, D¨¦cor Panel Ltd and North East Sheets and Panels Ltd, both in the north of England, and fire door manufacturer PWIDF Ltd, near to its Newport head office.

Looking ahead, he added: "So, although 2023 to 2024 shows no immediate signs of significant respite in terms of economic outlook, our strategy of further vertical integration and an enhanced value-added group proposition has, and will, see us weather existing storms successfully.

"More importantly, it has put us in an enviable position of potential accelerated growth during 2024-2025 too as markets, particularly the housing sector, recover and prices stabilise and begin to climb again. Demand will increase and we will gain the positive impact of a full financial year¡¯s trading with our latest acquisitions, all of which extend our scope and capabilities in areas that build margin and resilience in our business.

¡°With improving gross margins as a result of new value-added acquisitions, products and marketplaces, strong cash flow and a pipeline of further acquisitions, the future looks very exciting for the Premier Forest group of companies.¡±

: insidermedia.com