Contractor breaks into Tier 1 club with surge in income
McLaren has said it will break the £1bn turnover barrier this year as the firm cements its status as a Tier 1 contractor.
Construction group chief executive Paul Heather said the contractor was working on a broad range of projects and was not specifically targeting jobs in the Tier 1 market.
He added: “While winning and delivering top tier projects is in McLaren’s DNA, we are also staying faithful to our roots by continuing to work on smaller contracts.
“We will not turn our back on this as we grow because we wish to spread our skillset across a range of different projects and to develop our teams accordingly.”
Group chairman Kevin Taylor said breaking though the £1bn barrier would be a landmark – revenue in 2018 was £586m – but added: “Quality of construction and sustainable profitability will always be the most important goals for myself and our executive team.”
Taylor said the high-profile collapses of last year, such as Buckingham and MJ Lonsdale, had hit the supply chain the most but added firms like McLaren were also indirectly affected.
“Bonding becomes the biggest challenge,” he said. “The bonders start to question the industry as a whole [as a result of the failures].”
Turnover in the year to July 2023 was up 22% to £964m as the firm returned to the black with a £6.4m pre-tax profit from a £2.4m loss last time.
The firm is carrying out 75 live schemes at the moment and its jobs include turning a former Top Shop on London’s Oxford Street into a new £50m Ikea retail outlet while it is also carrying out a £130m revamp of a 1960s tower in Victoria for Landsec. And it is one of several bidders for the £100m Bank Overstation scheme in the City.
Heather said squeezed budgets meant two-stage work was taking around two months longer to get signed off than a couple of years ago but he added: “We’re not seeing a slowdown. There is increased competition for work but there’s no slowdown. Getting jobs over the line is about the timing of them for clients.”
The firm is seeing workloads tick up in data centres along with leisure jobs and refurbishment work of the kind it is carrying out in London’s Victoria for Landsec. It also said it has over £200m of revenue in the pipeline from health, education, building safety recladding and refurbishment work.
How McLaren’s turnover has grown in five years
No comments yet