Quality Roading and Services has made a record $1.6m pre-tax profit in the six months to December 2020, but its board chair warns “the future is challenging”.
QRS board chair Guy Gaddum says the company has delivered an excellent first-half performance achieving growth to a record level while maintaining high construction standards and a focus on zero harm in the workplace.
“But the future has it’s challenges as one of our main revenue streams comes to an end, so we’re continuing to focus on setting ourselves up for future success.”
Mr Gaddum’s comments follow QRS’s presentation of its six-monthly report to its sole shareholder, Wairoa District Council (WDC) today.
The report shows that a third of QRS’s income stream July to December 2020 was from the Provincial Growth Fund ($5.2m). Other significant funding streams were Wairoa District Council ($4.3m), Waka Kotahi NZTA ($2.2m) and Higgins ($725,000).
Mr Gaddum says central Government has indicated there will be no more funding from the Provincial Growth Fund, and two high-value Waka Kotahi NZ contracts: Safe Roads and Boost, have come to an end.
“Last year threw up unique contract opportunities that QRS capitalised on. But even back then we were acutely aware that the civil contracting landscape would return to normal and we’d have to work hard on securing contracts when that time came.”
“There’s a number of ways we’ve prepared for this scenario.”
Over the past three years QRS has developed stronger relationships with sub-contractors who share similar values and has increased the project management skill base of its own staff.
“Now is a fantastic time to get in and make moves the company has always wanted to make including tendering further afield and for a greater range of construction projects.”
In other report highlights, an interim shareholder distribution of $100,000 was paid to Wairoa District Council ($50,000 last year); $3.1m has been paid in staff wages and salaries, and $18,300 worth of sponsorship and support in kind to local events, teams, schools and marae was made.
Work continues on QRS’s new operations hub which will provide space for additional staff, and human resource and finance workspaces. In 2020 QRS secured a Provincial Growth Fund loan of $1.9m for the hub on the proviso its sources the remaining 50 percent for its construction.
“A modern fit-for-purpose operations hub by the end of 2022 will unleash our business efficiency and potential, and help ensure Wairoa District Council can continue to achieve its goals for growth and development in the region,” says Mr Gaddum.
Capping off the six-month period was QRS’s celebrated win of the Hawke’s Bay Chamber of Commerce Supreme Business Award and the Outstanding Community Contribution Award. “It’s been an extraordinary six months for QRS and the next phase becomes one of adaption.”
7 April 2021
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