What does this year’s CN100 tell us about the state of the industry?
First, the good news: total revenue for the industry’s top 100 contractors is up by 6.6 per cent, while average pre-profit margins have climbed to 2.4 per cent, up from 2.1 per cent a year earlier.
And it’s better news for the smaller contractors in the CN100; those ranked between 76 and 100 in the table, typically with a turnover between £110m and £170m, are reporting average profit margins of 3.3 per cent.
The lower quarter of the table has seen two new entries – demolition specialists Erith and civils firm R J McLeod – while firms including Herbert T Forrest and M&E specialists Gratte Brothers have re-entered after dropping out in last year’s edition.
But at the other end of the table – where the top 10 contractors make up nearly 48 per cent of the total CN100’s turnover – construction firms are still seeing tough times as they work their way through a backlog of problem contracts.
At 1.2 per cent, average pre-tax margin for the top 25 contractors is down from last year’s 1.8 per cent and still significantly lower than the 2.4 per cent reported in 2014’s CN100 – showing the ongoing legacy of the recession.
But one of the crucial things the CN100 does show is that smaller, more agile companies are beginning to see their restructuring efforts in the wake of the recession bear fruit.
Interviewees– which included Graham executive chairman Michael Graham, McAleer & Rushe MD Martin Magee and Bam Construct’s James Wimpenny – all agreed that restructuring their companies to focus on selectivity, rather than chasing turnover, has allowed them to flourish in this post-recession world.
And experts reflecting on the CN100, including Simon Rawlinson of Arcadis and Pick Everard’s Mike Reader, agree that this new-found selective approach that more contractors are taking will set the industry up well for the unknown, post-referendum economy we find ourselves in.
This year’s CN100 is also set up so you can spend more time digesting the data and the industry analysis that sits with it.
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