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Murphy’s profit margin halves to 1.7% for 2017

Murphy’s pre-tax profit margin fell from 3.8 per cent in 2016 to 1.7 per cent last year as its turnover jumped to £712m.

Pre-tax profit for the company fell from £23.3m in 2016 to £12.4m for the year to 31 December 2017.

Chief financial officer David Burke said the company’s profit was “behind” targets and attributed the fall to “challenging” contracts on Canadian pipelines and power projects in the North of England.

However, turnover increased to £711.9m in 2017, up from £613.9m the previous year.

Turnover growth came largely from the company’s operations in Canada and the acquisition of Aecom’s Irish water business in early 2017.

Mr Burke said the company planned to make more acquisitions in 2018 to add more specialist capabilities to the business.

Murphy hired an investment director last year to oversee the company’s acquisitions.

In February this year the company bought Carillion’s UK power business, which Murphy had been “actively engaged” in buying since the end of 2017.

Despite the acquisitions, Murphy’s order book slid to £1bn from £1.2bn the year before.

The drop was due to the sale of its Australian joint venture Murphy Pipe and Civil in September, which netted the firm a £2.1m profit.

The company is currently working to a 10-year plan that aims to more than double turnover to £2bn and achieve a 10 per cent pre-tax margin by 2025.

Chairman Alastair Kerr said the plan will give the company “scale and resilience” in the market.

There was a change at the top of the business last October when John Murphy (pictured), grandson of the company’s founder, took over as chief executive.

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