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North Midland chief: We’ll make 5% margin in five years

North Midland Construction chief executive John Homer has revealed the group is aiming to reach a 5 per cent margin within the next five years.

In an exclusive interview with Construction News, Mr Homer outlined the group’s plans to raise operating margin to 3 per cent by 2019 and 5 per cent by 2021, having hit 0.9 per cent in 2016.

The chief executive has also targeted doubling turnover to £500m over the next five years, after posting £250m in 2016.

Mr Homer said investing in technology will be a major driver towards reaching its goal of a 5 per cent operating margin.

“We’re going to be investing in technology, which is going to give us massive efficiency,” he said. “We’re going to look at different methods of working, progressing in BIM, and our offsite manufacturing facilities will yield better margins.”

Commenting on the wider industry’s approach to innovation, Mr Homer described construction as “sluggish” when it comes to improving efficiency.

“Construction companies don’t do anywhere near enough in applying ourselves to be more efficient,” he said.

In addition, Mr Homer said the group’s telecommunications business, which has been significantly underperforming for the past couple of years, was now in a “steady state”.

According to the chief executive, the telecommunications division has undergone an “extensive restructure” over the past 12 months after recording operating losses of £2.1m in 2015 and £2.6m in 2016.

Around 40 per cent of the division’s staff have been hired within the past 12 months, with the business split into three separate units each run under a separate leader in a bid to improve their focus.

Mr Homer joined North Midland Construction as chief executive in June last year.

Prior to this, he was Morgan Sindall MD for its South of England construction business.

Mr Homer joined Morgan Sindall in August 2004 and worked for the firm for 12 years.

He had previously served as deputy managing director for Galliford Try’s construction business in the South, and had been divisional director at Bam Construction UK for 15 years.

North Midland chief: We’ll make 5% margin in five years

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