Sir Robert McAlpine sees 38% fall in profit

Contractor Sir Robert McAlpine saw a fall in profit of 38% over the past year, although revenues rose 10% to £742m.

Results for the contractor’s private holding company Newarthill, for the year ended 31 October 2011, showed contracting revenues for Newarthill rose 10% from £673.8m to £742.9m over the year.

But the results showed operating profit for its contracting work falling 38% from £30.8m to £19.2m.

The firm said its contracting revenues remained concentrated in the commercial, residential, leisure, education and infrastructure sectors.

The group said: “In an increasingly demanding market our construction company continued its strategy of pursuing work where margins adequately reflected the inherent risks of the project.

“The result of this approach is another successful year and continued confidence in the future operations of the company. There was an increase in opportunities in the latter part of 2010 resulting in growth in turnover and order book in 2011.

“Although it is expected that the UK construction market will remain challenging, our strong balance sheet, stable and significant cash balances combined with negligible borrowing … continue to leave the group in an excellent position to exploit profitable opportunities as they arise.”

The contractor pointed to its “highly successful” delivery of the Olympic Stadium as a key milestone, which was “delivered ahead of time and under budget”.

The overall results for Newarthill showed a fall in pre-tax profit for the group of more than a quarter from £27.4m in 2010 to £20.1m last year.

However, revenues for the overall group, including share of joint ventures, rose 9% from £779.1m in 2010 to £845.5m last year, while underlying group turnover climbed from £707m to £788.8m.

In the UK, turnover grew 15% from £670.2m to £771.9m, but fell in the US and Caribbean by more than half to just £16.9m.

The results also showed that the number of employees across the group remained relatively stable, falling slightly from 1,996 to 1,956.

As first revealed by Building, the contractor’s recent wins included the new US embassy job in London, in partnership with US firm B.L Harbert, as well as the £550m Bloomberg HQ job, also in London.