The Banks Group continues business transition after recording £18m operating profit

County Durham-headquartered renewable energy, property, mining and transport firm The Banks Group is continuing its transition into a growing range of business areas after recording a substantial operating profit over its last financial year.

The family-owned employer has reported a combined operating profit of £18m across all of its businesses for the financial year ending 30 September 2021, down from £26m the previous year due to a combination of the end of its coal mining operations, delayed planning permissions and disruptions caused by Covid.

However, the loss of earnings from its mining business is being made up by earnings from its property and renewables businesses, with expectations for 2022 showing significant improvements on 2021 levels.

Overall group sales for the 2021 financial year were down at £67m from £96m in the previous period, but are also expected to recover strongly in 2022.

Banks Renewables’ total energy generation capacity now stands at 223MW, a figure which is set to increase to nearly 300MW with the expected commencement of generation at its Kype Muir Extension wind farm in South Lanarkshire before the end of 2022.

The Group’s renewable energy business significantly increased its pipeline of onshore wind farms under development through the year and has a potential additional capacity of over 400MW across four further sites in Scotland

In addition to new onshore wind farm projects, Banks is bringing forward flexible energy technologies, including solar energy, battery storage and flexible power generation, and was granted planning permission last year for the 50MW Barnsdale solar energy park to the south east of Leeds.

The Group has also continued to support local community groups and environmental projects by awarding 91 community grants totalling over £368,000 from the funds linked to its different operational and planned developments during the year.

Simon Fisher, group finance director at The Banks Group, says: “As expected, the performance of our business in 2021 was transitionary in nature, with the end of our coal mining operations, project delays caused by the Covid pandemic and planning permissions taking longer to be obtained.  However, the Board believes that the Group remains well placed to deliver strong growth in the coming years.”

Banks Property’s year-on-year sales of consented land for housebuilding was again affected negatively by local authority delays in determining planning applications but increased marginally from £2.5m in 2020 to £3.7m in 2021.  Sales for 2022 are already ahead of 2021 levels with further improvements leading to an expected strong recovery from transactions across the North East and Yorkshire.

Turnover from the firm’s Mining division reduced from £29.8m in 2020 to £6.4m in this period following the end of coal production and the sale of the company’s last 360,000 tonnes of coal.

Banks secured its first external non-coal contract late last year, taking over as principal contractor to mine gypsum for Saint-Gobain Formula from their Bantycock Quarry near Newark, and is looking to utilise its resources and the skills within its minerals team to win further mining and earthworks contracts.

Simon Fisher continues: “Wind speeds were at an extremely low levels for long periods during our last financial year compared with long term averages and this impacted on Banks Renewables’ revenues in 2021, but with improved wind speeds already being seen this year, a strong improvement is expected in 2022.

“Development work continues to proceed apace to bring forward new onshore wind farms, two of which already have planning consent, and with renewable technologies including solar power, battery storage and small-scale flexible power generation under development, Banks Renewables is well positioned to increase its contribution to the UK’s journey towards its Net Zero targets in the coming years.

“Our expectations for Banks Property were hampered by several key schemes being delayed in the planning system which is not an uncommon problem for developers across the areas where our companies are active. Planning delays are also contributing to shortages of the consented land for much-needed new homes.

“Despite this, we have a substantial portfolio of land suitable for new housing developments, as well as a strong project pipeline, and we are continuing to expand our developments throughout the north of England, Yorkshire and Scotland to capitalise on the high level of demand for land for residential use.

“We are extremely proud of what our coal mining business achieved over the 46 years from its formation to its closure in providing valuable skilled employment for many people at the same time as delivering long-term economic and social benefits to the many communities which have hosted our projects. We are now applying our mining resource including our people’s skill base to develop opportunities in areas other than coal mining.

“Our transport business is now employed on the transport of minerals other than coal, and the skilled plant management workforce is now engaged in Banks Plant Solutions, which provides maintenance and repair services to other users of mechanical equipment as well as supporting Banks’ new operations.

“All of our operations continue to bring a wide range of tangible benefits to the communities in which they are located, in line with our longstanding Development with Care approach which has been central to our success. We are proud of the substantial and continuing contribution that our schemes enable us to make to the excellent work of community groups, charities and other good causes.”