After several loss-making years, a change in both management and approach has seen Gateshead-based Acrol Modular turning a profit once again. This turnaround has been further enhanced by a number of major projects including the development of a £5.86m Workspace and Growth Hub facility in Cheltenham, the company’s largest contract to date.
“We have been working on the design and specifications for the Cheltenham project for around 18 months,” explains William Johnson, who has played a key role in Acrol Modular’s renaissance since becoming Director four years ago. “We started building the units back in in August and they’re now going to site in readiness for installation, which will take around three weeks. Our sister company, Acrol Air Conditioning, will be looking after the full M&E package, which involves a full four-month onsite programme of works, so it’s a significant project for the overall business.”
The development, which is partly funded by £3.5m from central government’s ‘Getting Building Fund’ and the Growth Hub via First LEP, Gloucestershire’s Local Enterprise Partnership, will see the construction of a new modular building to house a workspace for the cyber tech, digital and creative sectors, a Growth Hub to support business development, an event space and café.
Acrol Modular has also recently handed over a fully equipped medical centre facility in County Durham that houses pharmacy and dental suites, which again underlines the health of its workstream and the turnaround it has enjoyed in recent years.
The modular side of the business is owned by Mike Kears and Tom Wood, who also own the sister company Acrol Air Conditioning, but both businesses share the same head office in Gateshead. The modular operation initially began life developing cabins before expanding into modular with steady growth over the years. Acrol Modular has now chalked up over two decades of operation but despite this longevity, under the previous directorship the company was perhaps guilty of not pushing itself to its potential and endured several loss-making years as result. This all changed with the arrival of Mr Johnson & Wayne Le Montais (Sales Director) heralding a new strategy that has turned the company around. “While we were never going to be one of the biggest operators in the marketplace, there was definitely potential for growth and so it has proved,” he outlines. “The company was in need of streamlining and had to radically modernise its culture. Once this process was completed, we were in a much stronger position and business has really taken off as a result. We’re still relatively unknown within the wider marketplace but we’re confident that the Cheltenham contract, along with the other major projects we have secured recently, will help raise our profile considerably.”
The changes that have been implemented in recent years not only helped to reverse Acrol Modular’s fortunes but also ensured it was in a much better position to deal with the pandemic. “We have managed Covid fairly well and have been able to maintain full operation of the factory thanks to the various measures we introduced,” says Mr Johnson. “Being able to keep delivering for our clients has allowed us to reap the rewards at a time when other operators weren’t so fortunate”.
“There were some challenges of course – such as issues regarding materials supply and increased costs – but thankfully we have excellent long-established relationships with our suppliers, which helped minimise disruption. Prior to joining Acrol Modular, for 11 years I worked in logistics and design at Nissan in Sunderland and one of the things they taught me was the importance of looking after your supply chain and having good communication links. Rather than being ruthless with suppliers, it’s much more beneficial to work with them to help resolve any problems. The relationship should very much be a two-way street that works in everyone’s interests.”
The wisdom of this ethos has certainly played its part in Acrol Modular’s recent growth, although the business is keen to not get too carried away just yet.
“We’re not going to be the biggest operator but we know our position in the marketplace and where our strengths lie. We’ve tripled turnover from £1.3m to between £4m and £5m in just four years. On the back of the Cheltenham project and the other developments we’re involved in, we’re in-line for another great year. We’re committed to maintaining this progression so that we keep moving to the next level.
“We have well developed facilities that allow us to build bespoke solutions for our clients, whereas many of the larger operators have to stick to a standard range. This means we can build anything for anyone and, as a consequence, we have a wide-ranging client base that includes the NHS, the MoD and the Police, including the National Police Air Service (NPAS), for which we have carried out a couple of £1m projects in recent years. We have also completed work for supermarkets.
“One sector we don’t touch is living accommodation, as it’s an area that we’re not set up for and because it requires significant funding. However, we can do pretty much anything else, from commercial sites through to event spaces. Being able to tap into Acrol Air Conditioning’s capabilities means we’re able to provide M&E services in-house and offer a full turnkey solution.”
Having turned the business around so successfully and weathered the worst of the Covid storm, Acrol Modular is determined to keep the momentum going. “We’ve reached a level that we want to stay at with a view to improving our turnover and profitability going forward,” says Mr Johnson. “Although we are keen to keep progressing, we’re also mindful that we don’t want to risk overstretching ourselves. Turnover has grown quite significantly in a relatively short period of time and it would perhaps be difficult to sustain that level of expansion indefinitely. We certainly weren’t expecting to triple our turnover as quickly as we did, so a period of consolidation is on the cards. We have short and medium term business plans in place and are on track with those, which gives us confidence for the longer term.”
If the Cheltenham project is anything to go by, this confidence is more than justified, as the signs are that Acrol Modular is on course to maintain the forward progression it has been enjoying in recent years.
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