NG Bailey chief executive David Hurcomb has told Construction News its decision to walk away from work was a major factor behind profit growth in its latest accounts.
Mr Hurcomb was speaking to CN after the specialist posted a pre-tax profit of £19.6m on revenue of £481m for the year to March 2018 – a 5.4 per cent increase on the previous year’s profit.
“A lot of the reason we’ve been quite successful is because we have walked away from projects, which on the face of it may hurt you in the short term, but the reality is better [in] the long term,” he told CN.
The NG Bailey boss said these decisions were particularly important given that a number of schemes had been cancelled during the company’s most recent financial year.
“There were definitely jitters in the market in 2017 we saw a number of projects significantly delayed and a few postponed indefinitely,” Mr Hurcomb said.
“The commercial sector tailed off very significantly towards the end of last year and projects that were perhaps on the cusp didn’t get across the line.”
Mr Hurcomb said he believed cost pressures associated with a weakened pound and a lack of confidence were factors in the delay and cancellation of projects.
He added that the business was anticipating some economic instability over the coming year as Brexit negotiations neared a conclusion.
“I think we’re going to be in for some pretty choppy water over the next 12 months,” he said.
“There’s little doubt about that, because whatever deal we get things are going to have to settle down and we’ll have to deal with the implications.
“I think whatever happens we’ll have to go into it and hope we can fight our way out of it.”
Despite these concerns, Mr Hurcomb said he expected NG Bailey to grow as recently secured contracts progress and the business benefits from its takeover of services firm Freedom Group earlier this year.
“For us over the next 12 months, we’re actually expecting to grow quite significantly off the back of the acquisition we made towards the back of our year end,” he said.
“At the end of 2017/18 [we] secured some quite significant large major infrastructure projects which will start to really deliver on the ground in 2018/19.
“We are going to see quite reasonable growth the next 12-18 months, we’re pretty confident about that.”