With less than 24 hours until the CN100 2017 rankings are revealed, we look at the backdrop to this year’s top 100 and the trends to watch out for.
Will turnover growth slow?
Growth in the top 100 contractors’ combined turnover accelerated in last year’s CN100 to 6.5 per cent, with the post-recession recovery well established and workloads in several sectors booming.
However, events of the past 12 months have brought renewed uncertainty, with some clients beginning to tighten the purse strings. Amid this shifting climate, can top-100 revenue continue to grow at the pace of the past few years?
Overall margins have been positive…
Despite concerns over profitability across the industry, the average pre-tax margin among the top 100 contractors actually edged up as per 2016’s CN100, having been relatively stable in the years before that.
The evidence would suggest that those concerns regarding low margins stem primarily from high-profile cases of companies in difficulty.
..but heavyweights have struggled
This argument is strengthened when we analyse the past four years of average margins for just the CN100’s top 10 contractors, which have been on a consistent downward curve.
Given the eye-watering losses made by some of construction’s biggest firms over the past 12 months, the question for this year’s CN100 is not whether top-10 margins have fallen again, but by how much – and whether overall top-100 margins will be dragged down with them.
Will headcounts decline?
The well-publicised difficulties encountered by some of the biggest businesses also turn attention to costs, such as overheads.
While major rounds of job cuts have been few and far between, it will be interesting to analyse any changes in headcounts among contractors – especially for the big hitters.
The top five status quo
The identity of the top five contractors by turnover has been unchanged since CN100 2014.
Indeed, Laing O’Rourke’s fall from third to fifth last year is the only significant movement among the five in three years.
The question is: will this hegemony be disrupted in tomorrow’s CN100 2017 – and if so, which contractor will be the one to do it?