McLaren Group has reported an increase in profit and turnover in its latest results, but problem contracts continue to hit its construction arm.
The group posted a turnover of £449.5m for the year to 31 July 2015, up from £432.8m a year earlier, while profit was up by 29 per cent over the same period, hitting £14.2m.
However, the group’s construction division posted a loss of £11.8m on a turnover of £378.1m, which McLaren blamed on “a small number of loss-making contracts”.
“These long-duration and complex projects were secured in extremely competitive market conditions and have been successfully completed during a period of rapidly rising sub-contract prices,” the firm said.
The group’s construction arm has been awarded preferred bidder status on contracts worth more than £250m for clients including Grosvenor, British Land, Goodman and Legal & General.
In July last year, the firm failed to agree terms with client United House for its £130m City North project.
The group’s construction division was overhauled in November 2015 into five businesses: London, the South, Midlands & North, Major Projects, and International.
The international arm has six ongoing construction projects in Dubai and Abu Dhabi.
McLaren’s property division performed strongly in 2014/15, generating a profit of £26m for the year, up from £6.9m a year earlier.
This was driven by a number of high-profile property sales, including its Bondway site at Nine Elms to a Middle Eastern developer for £103m, and the refinancing and sale of a 253-bed student accommodation scheme in Southwark for £61m.
Commenting on the results, McLaren Group chairman Kevin Taylor said: “This has been a strong year for the McLaren Group. We have traded profitably despite difficult conditions, and have expanded across all fronts.
“The balance of the McLaren Group, with our property division performing particularly strongly, insulates us from wider challenges and we are pleased to have also re-organised our construction division to align itself more closely with its customers.”