McLaren profit nearly doubles as firm says income to top £1bn this year for first time

McLaren saw profit nearly double last year as the firm said it expects turnover to have topped the £1bn for the first time by the time it files its next set of results.

The firm said pre-tax profit jumped to £11.9m in the year to July 2024 from £6.3m last time with chairman Kevin Taylor calling it a “stable year, full of successes for our customers and teams”.

The firm said it has begun a £200m job to expand the ExCeL London expansion while its ongoing jobs include refurbishing the former House of Fraser flagship store on London’s Oxford Street.

McLaren has also picked up the £225m Cardiff Arena scheme, having beaten Vinci last autumn, while it won the £100m Bank Overstation job for Helical last summer.

But the firm saw turnover fall 4% to £924m during the period which chief executive Paul Heather said was down to some PCSAs taking longer to convert and hold-ups caused by getting sign-off under the new building safety rules which have increasingly been cited by firms as slowing down jobs.

Heather said gateway 2 checks were taking anywhere between six months and a year to complete, leading to jobs being delayed. “We all know it’s needed but the process is very slow,” he added. “The pace of it is delaying jobs.”

McLaren is the latest firm to voice concerns about the time it is taking for gateway 2 checks to be signed off with student developer Unite saying it was adding six months to its schemes while Quintain chief executive James Saunders told Building there were “lots of frustrations” with the delays.

McLaren said it expected income this year to top the £1bn mark with the firm saying around three quarters of its business is from repeat clients including British Land, Landsec, Argent Miller Developments and the Cadogan Estate.

Taylor added: “2025 will be the year we exceed turnover of £1bn and that is a major achievement for a privately owned contractor.”

The firm has been adding to its newly launched construction management business with the firm bringing in former Sir Robert McAlpine staffers Vince Lydon and Glen Harding to spearhead its push into CM while it said it has also recently recruited David Davies from Wates-owned SES to become its building services director for its CM business.

Heather said CM was a procurement option both the private and public sector were having to consider more. “With the £300m, £400m, £500m schemes – I’m not sure who’s got the appetite to do those on a design and build basis.”

And he added contracting margins of between 1% and 2% would remain the norm. “I can’t see it [the number] changing radically. The whole piece around risk-sharing needs to be done differently.”