NG Bailey targets turnover of £500m within three years

M&E specialist contractor NG Bailey is targeting turnover of £500m within the next three years, the firm said after reporting results for the year to February 2015 showing revenue of £365m.

NG Bailey chief executive David Hurcomb (pictured) said the firm, which managed to nearly double its operating profit in the year despite its overall pre-tax profit falling sharply on lower investment income, was “not chasing turnover,” but it was nevertheless “lower than we’d like it to be”. He said: “We refreshed our business plan last year and £500m is where we want to get to, by around 2017/18.”

Despite this ambition, the £365m turnover was a decline from the £380m recorded in 2014, which Hurcomb blamed on NG Bailey’s decision to reduce its exposure to the volatile London market, as well as a reduced volume of rail work following the well-publicised problems at Network Rail.

Success at Hinkley justifies our decision to invest in a JV [with Balfour Beatty]

David Hurcomb, NG Bailey

The firm, which was last week confirmed as preferred contractor in joint venture with Balfour Beatty on EDF’s £460m M&E package for Hinkley (see page 12), reported an operating profit of £2.3m, up 92% from £1.2m last year despite £700,000 in restructuring costs.

However, the company’s pre-tax profit for the year was down 39% to £4.2m, because of a sharp decline in income from the firm’s stock market investments, which fell from £5.7m to just £2.2m.

Hurcomb said the rise in operating profit was a result of the firm’s decision to broaden its business to infrastructure M&E as well as traditional buildings work, resulting in the Hinkley win, and to grow facilities management and IT networking businesses. He said: “We’re delighted at the success atHinkley, because it justifies our decision to invest in a JV [with Balfour Beatty] five years ago, and hopefully can get us going for the next 25 years.”

The FM and IT businesses turn over £65m and £60m respectively.

Hurcomb said the decision to bid more selectively for work in London was because, despite the buoyant new-build market, there was “still a lot of pain” for contractors, and the volume of staff recruitment and poaching made it a very risky environment. Hurcomb added that NG Bailey still had a number of poor performing “problem jobs” on its books, but that these had reduced in number from “10 or more” to “less than five”.