The demolition sector is seemingly weathering the storm of the recession better than others, with virtually all the top 10 contractors posting convincing growth in turnovers.
Combined revenue for the top demolition contractors was up by 27 per cent to £448 million according to their latest results, while pre-tax profits collectively were 43 per cent higher.
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Second-placed McGee reported a staggering rise in revenue of 59 per cent.
The group’s head of demolition Nick Taylor attributes this in part to diversification across the sector, saying that McGee is “consolidating the wider nature of the business now”.
“We are all branching out, and have had to,” he says.
He adds that client demand is a challenge. “Previously clients were facing three to four contractors, but now that list is more like six, nine or 12 contractors, so prices are going to vary,” he says.
“We believe we can still attract a premium if we can show clients how we can mitigate risks. Clients are more demanding; relatively speaking, it’s a buyers’ market.”
DSM has grown turnover by almost half, and has had the most significant rise in pre-tax profit.
Within its latest report, the company says the sourcing of new work is one uncertainty, but that “its diverse client base and niche position within the industry continues to afford protection against the worst effects of the recession within the construction industry”.
Mr Taylor is also optimistic. “Prospects over the next 12 to 18 months are good,” he says. “There is a better quality of jobs; those opportunities have not been there in the past two to three years.”
He says McGee works on jobs varying in value between £250,000 to £15m. Typically the firm has worked on contracts worth £5m or more, but Mr Taylor says that such sources of work have been scarce over the last two to three years.
Top demolition contractor Keltbray, meanwhile, posted growth in turnover of 24 per cent to £108.3m.
The company told CN in August that it expects its rail business to overtake its demolition and civils operations, though the latter still represented between 70 to 80 per cent of revenue last year and grew in turnover by 20 per cent.