Family-owned building services specialist Gratte Brother has ridden out industry cost pressures to deliver a small rise in profit.

Over the year to March 2024, pre-tax profit edged up to £2.7m from £2.5m previously on turnover slightly ahead at £226m.

Despite the improvement in trading, the data centre and commercial M&E fit-out contractor warned that cost pressures remained an issue, with staff costs continuing to jump.

While headline inflation rate has reduced during the year and post year-end, it said that the construction market still faced a significant labour skills shortage and material cost pressures, which were expected to increase further.

Gratte Brothers said it had managed to avoid any direct impact from the collapse of several contractors and subcontractors within the industry, due to tight vetting procedures.

But the impact of delays and inflationary pressures on a legacy project resulted in a further provision for contract losses of £2.5m (2023: £5.2m).

Its low operating profit margin of 1.2% (2023: 1.0%) reflected the challenging nature of the industry at present.

Cash at bank remained strong at £12m.

During the year Gratte Brothers maintained a good safety record with just one reportable health and safety incident across 817 directly employed staff, subcontractors and agency staff in over 1.8 million hours of on site working.