Engineering consultancy Sweco UK has returned to operating profit following a year of restructuring and workforce reductions, despite continued weakness in the UK infrastructure and commercial building sectors.
The group, which provides professional engineering consulting services across divisions including energy, water and environment, building services, and building standards, faced continued headwinds due to economic pressures and political uncertainty.
Part of the wider Sweco Group, Sweco UK reported a significantly reduced pre-tax loss of £423,000 for the year ended 31 December 2024, down from a £7.9 million loss in 2023.
Operating profit reached £1.5 million (FY2023: £7 million loss), marking its first return to the black since 2022.
Turnover dipped slightly to £112.4 million (FY2023: £112.7 million), but profitability improved in the second half of the year, supported by higher billing ratios, stronger average fees, and a focus on operational efficiency.
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To address market pressures, the company reduced its headcount, cutting technical staff by more than a tenth to 985.
Overall employee numbers fell to 1,101 (FY2023: 1,263), contributing to a near £9 million reduction in payroll costs.
Sweco said the cost-saving measures and improved project delivery helped offset difficult trading conditions, particularly in infrastructure and commercial property.
The market was hit by delays and cancellations to major projects due to economic uncertainty and political events, including the July 2024 general election.
Despite the pressure, cash reserves more than doubled to £7.8 million (FY2023: £3.7 million), while net assets fell 20.8 per cent to £4.2 million (2023: £6.3 million).
“Turnover in 2024 was slightly below last year, impacted by the challenging market conditions,” said bosses.
“The restructuring measures taken resulted in operational efficiency improving throughout the year and with higher average fees and higher billing ratio, led to enhanced performance in the second half of 2024, reflected in improved operating margins and profitability.”
The company continues to see strong demand in green energy, mission-critical data centres, and building standards.
While government spending delays have dampened infrastructure activity, the business expects an uptick in 2025 as planned investments start to flow.
Looking ahead, management said trade working capital remains a key focus as the business positions itself for renewed growth across the UK and Ireland.
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