The North East and Yorkshire group has shed some jobs and two locations amid a downturn in the sector but says there should be improvements ahead

Builders’ merchant James Burrell says it continues to battle through tough conditions in the construction market but is determined to bounce back.

The North East-based group, which also has a number of branches in Yorkshire, has closed two sites between 2024 and 2025, and shed more than 35 jobs in the same time. Bosses at the materials retailer say an anticipated recovery in the construction sector since its steep 2023 decline has not materialised and has required “tough decisions” of the family-owned firm.

Newly published accounts covering the year to the end of October show James Burrell built turnover from £95.1m to £96.3m as it returned to operating profit of more than £566,000, having posted an operating loss of more than £1.1m the year before. Pre-tax losses over the same period narrowed from £2.06m to £486,789.

Writing in the accounts, managing director Mark Richardson said: “The anticipated recovery across the construction sector following a sharp decline in 2023, has yet to materialise. The cost-of-living effects are still prevalent across society and UK businesses are still having to deal with elevated inflationary and interest rate effects.

“For a multi-generational family owned and managed business, who recognises its people as its biggest asset, this has meant tough decisions have been necessary to balance the conflicting priorities of maintaining an acceptable financial performance, whilst supporting the employee base who serve the business so faithfully.”

He added: “Although we are not where we want to be, there is a feeling that we are moving back in the right direction again. We are faced with a higher cost threshold than we have previously been used to after recent material price inflation, tax rises and increases in the living wage. But we have made the necessary adjustment to right-size the business accordingly, stripping out nonessential costs and process inefficiencies, aided by the implementation of our new IT system.

“Despite our marketplace remaining subdued and uncertainty continuing to cloud the present position, we believe there will be improvement ahead. Our strong financial base and continued reinvestment in the business should ensure that James Burrell will continue to prosper and to take advantage of new opportunities as and when they arise.”

The firm said the challenging trading conditions of the last three years showed no signs of abating in 2026, and that despite inflation having eased, interest rates remain high and economic growth was stagnant. Bosses expressed disappointment in the trading performance despite the small improvements reported, but said the firm remained resilient and “determined to bounce back” when demand recovers.

One of key factors contributing to those tough trading conditions has been sluggish housebuilding activity. Mr Richardson said regular government pledges to encourage the building of new homes had failed to come good, pointing to problems associated with higher interest levels, delays in the planning system, a lack of help-to-buy type incentives and red tape facing developers

It is hoped the closures will improve the retailer’s financial position

Kitchens chain Magnet is to shut 15 stores as part of a major restructure. The company said it would close the “underperforming” locations as part of a company voluntary arrangement (CVA) aimed at helping secure the group’s finances.

The proposed CVA is intended to “address property costs that are no longer sustainable”, the company said.

Magnet did not disclose how many workers would be hit by the closures, but said affected staff “will be supported throughout and suitable alternative roles within the business will be offered wherever possible”.

The majority of the brand’s 159 stores will not be impacted by the restructuring and will continue to operate as normal.

The proposals, which will be overseen by Natasha Harbinson, Will Wright and Chris Pole from advisory firm Interpath, are subject to creditor approval.

Sophie Rose, chief executive of Magnet Group, said: “This is a difficult decision and not one we have taken lightly, particularly where colleagues may be impacted.

“But taking this action now is the right thing to do for the long-term health of Magnet Group.

“It allows us to deal with property costs that are no longer sustainable and protect the stronger parts of our estate.

“I am confident these proposals will help Magnet Group build a stronger, more resilient business that is better placed to serve customers, support partners and return to sustainable profitability.”

Magnet said it would transfer any customer orders to the closest alternative store if their local site closes.

List of Magnet stores to shut

– Andover, Hampshire

– Birmingham Minworth, West Midlands

– Blackburn, Lancashire

– Bridgwater, Somerset

– Brighton, East Sussex

– Colwyn Bay, Wales

– Dorking, Surrey

– Farnborough, Hampshire

– Ramsgate, Kent

– Romford Trade, Greater London

– Stirling, Scotland

– Stockton, County Durham

– Watford, Hertfordshire

– Weymouth, Dorset

– York Trade, North Yorkshire

This article was written by

Follow

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

NEW YORK — Shares of Air Products and Chemicals Inc. surged more than 9 percent Tuesday as the industrial gases company announced it would not proceed with its Louisiana Clean Energy Project, freeing capital for other strategic priorities and signaling a shift in project focus.

The move sent the stock to around $296.58 in morning trading, reflecting investor approval of a more disciplined approach to capital allocation amid evolving energy market conditions. Air Products, a major supplier of hydrogen, oxygen and other industrial gases, has been navigating complex decisions around large-scale clean energy initiatives.

The Louisiana project, which involved blue hydrogen production and carbon capture, faced challenges including cost pressures and market dynamics. By stepping back, the company aims to redirect resources toward higher-return opportunities in its core industrial gases business and select growth projects.

Air Products maintains a strong global footprint with operations spanning atmospheric gases, process gases and specialty chemicals. Its business model benefits from long-term contracts with refineries, chemical plants and electronics manufacturers, providing stable cash flows.

The decision on Louisiana aligns with broader industry trends where some clean hydrogen projects have encountered delays due to permitting, infrastructure needs and economic viability. Air Products emphasized its commitment to the energy transition while prioritizing financial discipline.

Chief Executive Officer Eduardo Menezes has highlighted the importance of balancing innovation with returns. In recent quarters, the company reported solid operating performance driven by pricing actions, productivity improvements and volume growth in key segments.

Tuesday’s announcement provided clarity on capital spending plans. Air Products has a robust project pipeline, including expansions in Asia and investments in hydrogen infrastructure where demand fundamentals remain supportive.

Industrial gases demand has proven resilient across economic cycles. Air Products’ on-site supply model, where plants are built adjacent to customer facilities, creates high barriers to entry and predictable revenue streams.

The company’s merchant business, serving smaller customers through bulk and cylinder distribution, offers additional flexibility. Specialty gases for electronics and healthcare applications provide higher-margin growth avenues.

Analysts view Air Products as well-positioned in the hydrogen economy despite project adjustments. Its expertise in production, liquefaction and distribution positions it for opportunities in mobility, power generation and industrial decarbonization.

Tuesday’s share price reaction underscored the market’s preference for capital discipline over speculative large projects. Air Products shares had traded in a range reflecting mixed sentiment around clean energy investments before the announcement.

The company’s financial strength supports its strategic flexibility. Strong cash generation from operations and a solid balance sheet enable selective investments while maintaining dividends and share repurchases.

Air Products has a long history of innovation in gas separation and liquefaction technologies. Its membrane solutions and adsorption systems serve diverse applications from biogas upgrading to medical oxygen.

Sustainability remains integral to operations. The company publishes annual reports detailing progress on emissions reductions and community initiatives. Recent expansions, such as membrane manufacturing facilities, underscore commitment to technology leadership.

Global operations expose Air Products to currency and geopolitical risks, yet diversification across regions mitigates these factors. Asia continues as a growth engine with new plants supporting semiconductor and clean energy customers.

Tuesday’s trading volume was elevated as investors digested the news. The positive move contrasted with broader market caution in some industrial sectors.

Longer-term, analysts project steady earnings growth for Air Products driven by contracted volumes and pricing discipline. The company’s guidance has typically emphasized resilience even in uncertain macroeconomic environments.

Competitive landscape includes Linde and other industrial gas providers. Air Products differentiates through technology and customer relationships built over decades.

The Louisiana decision may open capacity for other initiatives. Management has signaled focus on optimizing existing assets and pursuing accretive opportunities in core competencies.

Investors will monitor upcoming quarterly results for updates on project pipelines and financial metrics. Air Products typically reports solid execution on safety, reliability and customer service.

The industrial gases sector plays a critical role in manufacturing, healthcare and energy. Air Products’ products touch everyday applications from food packaging to steel production.

Tuesday’s surge highlighted how strategic announcements can drive significant market reactions. The stock’s movement reflected relief that capital would be deployed more efficiently going forward.

Air Products continues to attract institutional interest for its defensive characteristics and growth potential. Dividend growth history adds appeal for income-oriented investors.

As the company refines its portfolio, focus remains on delivering value through operational excellence and targeted investments. The Louisiana pivot exemplifies this disciplined approach.

Market participants will continue assessing the implications for future project announcements and capital returns. Air Products’ track record suggests measured progress toward long-term targets.

The announcement reinforces the company’s adaptability in a dynamic energy landscape. By prioritizing returns, Air Products aims to strengthen its competitive position while supporting essential industrial processes.

Available for over a year

Af Malhotra sits in and discusses how entrepreneurs can use AI daily with Polly Dhaliwal.

The pair also chat about her career and her work in other sectors too.

Produced in Birmingham by Voxwave for BBC Asian Network.

Programme WebsiteShow less

Business confidence slipped over the past month as firms wrestled with stubborn inflationary and cost pressures, with the Middle East war now into its fifth month, according to a survey published today.

The index of sentiment among private-sector companies compiled by Lloyds Bank’s Business Barometer fell by 3 points to 44 per cent in June, leaving it below the 12-month average of 47 per cent. Economic optimism also dropped, down 4 points to 31 per cent.

The lender said businesses were most worried about the rising cost of production, a concern likely tied to the higher energy prices triggered by the Gulf conflict. Over the weekend the United States and Iran traded strikes, each accusing the other of breaching the terms of the ceasefire agreement.

The decline in confidence was most pronounced among manufacturers, where optimism tumbled by 10 points to 33 per cent, a reflection of the sector’s heavy energy use. The reading among retailers fell by 8 points to 45 per cent. Energy costs have remained the single biggest brake on SME growth for much of the past year, with smaller firms warning they have no price-cap protection of the kind afforded to households.

Although inflationary worries persist, oil prices have eased sharply in recent weeks. The price of a barrel of Brent crude, the international benchmark, has fallen back below the levels seen before the conflict broke out at the end of February.

Amanda Murphy, chief executive for Lloyds Business and Commercial Banking, said: “While cost pressures and global uncertainty continue to weigh on business confidence, international firms are much more confident, with many seeing signs of supply chain disruption easing and strengthening customer demand.”

There was better news on jobs. Lloyds said companies’ hiring intentions rose for the first time in three months. Some 55 per cent of the 1,200 firms surveyed said they wanted to expand their workforce, against 14 per cent planning to cut headcount, a fall of 3 points over the month.

Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said: “Overall, while some sectors are holding up, the data suggests that uncertainty is still feeding through unevenly and weighing more heavily on parts of the economy than others.”

The figures may signal that the UK labour market is in the early stages of stabilising after two years of weakening. Data from the Office for National Statistics showed vacancies have fallen to their lowest level in five years.

Growth has also taken a knock from the war. GDP contracted by 0.1 per cent in April, the latest ONS figures show, and the closely watched purchasing managers’ index revealed that activity in the private sector dropped to a 14-month low.

The fall in confidence over the past month may equally be tied to the latest bout of political and policy uncertainty in Westminster, after Sir Keir Starmer resigned as prime minister earlier this month, clearing the way for Andy Burnham to enter No 10 as soon as mid-July.

Mr Burnham has yet to flesh out his tax and spending plans or name his chancellor. Ed Miliband and Wes Streeting are regarded as the most likely picks to replace Rachel Reeves in No 11. Starmer’s probable successor has signalled a preference for lowering VAT on the hospitality industry and overhauling the business rates regime.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.

Advertisement