UK's Top 100 Construction Contractors 2022
Steve Menary takes a deep dive into the
financial performance of the UK’s 100 leading construction contractors.
The construction industry’s leading
companies are bouncing back from the worst of the Covid-19 pandemic and the
shock of Brexit; turnover and profits are improving – but challenges remain.
The Construction Index’s latest Top 100
shows leading construction contractors altogether earned £70.4bn in revenue,
according to accounts available at Companies House as of the end of July 2022.
This was an increase of just 3.2% on the previous year’s results for the same
companies.
But turnover has increased at 62 of the Top
100 and there has been a massive upswing in terms of profitability.
Only 14 firms in the Top 100 registered a
loss in their latest accounts. For many of those business, which include Tarmac
Trading, Mace, NG Bailey and McLaren, the most recent figures available at Companies
House for were for 2020, when the pandemic was wreaking the most financial
damage.
As a result, a combined profit for the Top
100 could have been even greater than the £1,404m we see here. This aggregate
profit was a huge improvement on the previous trading year, when the same 100
companies posted an aggregate loss of £43m.
The reason for the huge swing is that the
majority of the annual results posted here are compared to a previous
accounting period that was caught up in the eye of the pandemic. Companies
including Kier, Amey and Multiplex posted huge deficits in their previous
year’s trading and that dragged the overall figure into the red.
Taking away the losses posted by those
three companies, the rest of the Top 100 generated profits of £450m in the
previous year. That is perhaps a better illustration of the rebound in the
industry’s fortunes.
Earnings are improving and profit warnings
from companies listed on the UK stock market are at record low levels. A spread
of work is allowing larger companies to rebuild their balance sheets but only
one contracting family, the Kirklands (owners of Bowmer & Kirkland, which
is ranked 16 on turnover in the latest TCI Top 100) still features on the
latest Sunday Times’ Rich List.
The industry does remain a major part of
the UK economy and the Top 100 employ more than 219,000 people directly, but
while the majority of leading contractors have recovered there have still been
casualties.
Over the past year, NMCN and Midas – ranked
41 and 62 respectively in last year’s Top 100 – both collapsed and insolvencies
started to rise significantly at the start of 2022 as government support and
credit forbearance dissipated. The collapse of even a mid-sized main contractor
inevitably gains more media coverage but it is the specialist contractors who
are bearing the brunt of tighter conditions.
In the first six months of this year, the
number of construction companies becoming insolvent doubled to 2,082. More than
half (1,082) of these corporate failures were specialist contractors. The number
of specialist contractors being liquidated has also more than tripled over that
same time period.
An added pressure began in March 2022, when
the first repayments were due to be made on loans made through the Coronavirus
Business Interruption Loan Scheme. CBILS closed to new applications at the end
of March 2021and businesses were given 12 months before starting to make
repayments on loans of up to £5m over six years. The early signs for
construction are not good.
