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Recession squeezes turnover for medium-sized contractors

The first wave of private independent contractors’ accounts for 2009 have revealed £175 million in lost turnover for four firms alone.

SDC, Forth Holdings, Ogilvie and William Davis saw their collective turnover fall by more than a quarter.

The results give a glimpse of the scale of the difficulties being faced by medium-sized contractors during the recession.

Ogilvie Group - the 49th largest firm in the latest CN100 - saw its turnover for the year to 30 June 2009 total £206.2m, down from £258.3m the year before.

Its construction turnover fell from £147m to £88m. But the group still recorded a pre-tax profit of £2.4m compared with £5.7m the prior year.

A spokeswoman for Ogilvie said the firm had been hit by a general drop in work due to the recession as well as by the Scottish Government’s decision to abandon public private partnership projects north of the border.

She said: “It is going to continue to be exceptionally difficult this year. But we are still winning work and are happy we are still making a profit.”

Stirling-based Forth Holdings also highlighted the uncertainty of the PPP market in Scotland after its turnover for the year to 31 August 2009 fell to £131.6m from £145.9m the year prior.

But Forth managed to increase its pre-tax profit slightly to £7.7m from £7.5m.

Bedford-based contractor SDC saw turnover for the year ended 30 September drop 31 per cent to £87m from £126.4m the prior year.

Pre-tax profit dropped to £533,493 from £920,765. The firm said delayed starts had suppressed turnover in 2009, but it hopes to do the work - worth £120m - over 2010 and 2011.

Loughborough-based William Davis saw its turnover for the year to 31 May 2009 fall by almost half from £143m to £73.7m.

The firm made a pre-tax loss of £10.7m, compared with a profit the prior year of £21.8m.

One other firm from the CN100 posted accounts in recent weeks - Rotary, based in Newtownabbey in Northern Ireland, which saw its turnover for the year to 30 June 2009 total £200.4m. This compared with £158.8m in the nine months to 30 June 2008.

PricewaterhouseCoopers construction strategy partner Chris Temple said medium-sized contractors were being squeezed by clients and larger contractors.

He said: “There has been a shift coming through from many clients towards [working with] larger contractors, along the lines of the idea that bigger is better.

“The larger contractors have themselves got less work to do so they are looking to the smaller contracting opportunities.

“The result is a lot of pain for the medium tier of contractors.”