Top 150 contractors and housebuilders: Split fortunes

It’s the time of year again when Building reveals its exclusive Top 150 contractors and housebuilders league tables. 

As well as full analysis of the results in the feature below the tables, the complete data set is now available, including:

• Top 150 contractors and housebuilders by turnover
• Top 20 contractors by contracting turnover 
• Top 20 housebuilders by housing turnover
• Top 10 housebuilders profit per house sale
• Bonus data: Additional tables with aggregated data that allows you to compare total turnover with average margins

Top 150 contractors and housebuilders by turnover 

2018	2017	Company	Total turnover £000	Change on 2017	Pre-tax profit £000	Year end	Contracting £000	Housing £000	Property £000	Services £000	Other £000
1	1	Balfour Beatty	8,264,000	-1.24%	117,000	Dec-17	6,649,000			1,061,000	524,000
2	3	Barratt Developments	4,650,200	9.80%	765,100	Jun-17		4,589,100	61,100
3	4	Kier	4,282,300	4.90%	25,800	Jun-17	2,019,400	375,700	182,000	1,688,100
4	6	Taylor Wimpey	3,965,200	7.86%	682,000	Dec-17		3,965,200
5	5	Interserve	3,666,900	-0.50%	-244,400	Dec-17	1,338,700			1,881,400	229,000
6	7	Persimmon	3,422,300	9.10%	966,100	Dec-17		3,422,300
7	11	Laing O’Rourke	3,172,500	26.23%	-66,900	Mar-17	3,172,500
8	12	Galliford Try	2,820,200	5.61%	58,700	Jun-17	1,526,900	1,267,600			25,000
9	9	Morgan Sindall	2,792,700	9.02%	64,900	Dec-17	1,332,600	473,500	185,900	66,200	734,500
10	8	Berkeley	2,703,700	-0.73%	934,900	Apr-18		2,703,70
11	10	Amey	2,591,024	2.33%	-43,878	Dec-16				2,591,024
12	13	Bellway	2,558,561	14.19%	560,723	Jul-17		2,558,561
13	14	Mitie	2,203,700	3.78%	-24,700	Mar-18				2,203,700
14	16	Keller	2,070,600	16.33%	110,600	Dec-17	2,070,600
15	15	Mace	2,036,888	-0.20%	23,012	Dec-17	1,632,768		16,800	387,320
16	18	Costain	1,728,900	4.28%	38,900	Dec-17	1,728,900
17	22	ISG	1,708,800	28.55%	9,100	Dec-17	772,700				936,100
18	21	Redrow	1,660,000	20.12%	315,000	Jun-17		1,660,000
19	20	Skanska UK	1,650,581	19.30%	23,647	Dec-16	1,650,581
20	17	Bam UK	1,631,328	-4.56%	32,083	Dec-17	1,579,528		300	51,500
21	19	Wates	1,621,973	5.88%	32,892	Dec-17	1,320,497	35,650		170,246	3,809
22	23	Willmott Dixon	1,296,414	6.00%	33,510	Dec-17	1,168,326				128,088
23	26	Multiplex Construction Europe1	1,155,385	11.53%	4,213	Dec-17	1,155,385
24	27	Crest Nicholson	1,043,200	4.63%	207,000	Oct-17		1,043,200
25	25	Bovis Homes	1,028,223	-2.52%	114,001	Dec-17		1,028,223
26	-	Engie2	987,380	-12.36%	33,323	Dec-16				987,380
27	30	Bowmer & Kirkland	928,252	-0.26%	64,440	Aug-17	928,252
28	34	Bloor Homes	917,705	27.73%	152,521	Jun-17		917,705
29	28	Mears	900,184	-4.25%	26,484	Jun-17				766,121	134,063
30	29	Vinci Construction UK	870,705	-8.23%	22,430	Dec-17	626,923			223,636	20,156
31	33	VolkerWessels UK	870,381	-0.74%	18,911	Dec-17	738,987			114,307	17,087
32	32	Sir Robert McAlpine/Newarthill	869,609	8.74%	-43,200	Oct-16	813,472		8,485		47,652
33	43	Countryside Properties	845,800	25.99%	141,700	Sep-17		845,800
34	31	Lendlease Europe	800,363	-10.94%	41,505	Jun-17	670,628		129,735
35	36	Homeserve	785,000	23.97%	98,300	Mar-17				785,000
36	40	Cala	747,928	27.40%	70,445	Jun-17		747,928
37	39	J Murphy3	711,900	15.96%	12,400	Dec-17	711,900
38	35	McCarthy & Stone	660,900	3.93%	92,100	Aug-17		660,900
39	38	Morrison Utility Services	655,488	6.76%	23,605	Mar-17				655,488
40	106	McLaren Construction	600,345	24.94%	3,204	Jul-17	600,345
41	44	Robertson	579,872	27.82%	26,147	Mar-17	458,022	80,232			41,618
42	42	John Graham	565,921	11.43%	16,056	Mar-17	565,921
43	41	Renew Holdings	560,838	6.68%	16,302	Sep-17	106,835			452,423
44	51	Bouygues	555,626	58.95%	-78,458	Dec-16	555,626
45	45	Carey	549,220	27.52%	19,118	Mar-17	475,295	46,111			27,811
46	49	NG Bailey	500,300	22.77%	18,600	Feb-17	500,300
47	-	Eurovia UK	486,224	-2.45%	22,210	Dec-17				486,224
48	141	McLaughlin & Harvey4	465,789	9.06%	11,068	Dec-17	411,284				54,505
49	47	Winvic Construction	462,075	10.61%	28,479	Jan-17	462,075
50	24	Keepmoat Homes5	423,199	25.70%	25,435	Mar-17		423,199
51	48	Buckingham Group Contracting6	423,085	3.62%	16,582	Dec-17	423,085
52	63	Keltbray	417,543	13.03%	23,358	Oct-17	417,543
53	61	Hill Holdings7	415,603	13.16%	47,182	Dec-17	239,753	175,850
54	55	Henry Boot	408,486	33.14%	55,392	Dec-17	81,876		250,418		76,192
55	68	Galliard	391,913	49.97%	74,010	Mar-17	166,742	225,171
56	67	Northstone (NI)	374,984	43.45%	4,342	Dec-16	312,737				62,246
57	56	Ardmore Construction	370,009	22.17%	15,499	Sep-17	370,009
58	71	Avant Homes	368,973	3.43%	20,631	Apr-17		368,973
59	53	Osborne	348,299	1.70%	3,594	Mar-17	307,599			40,700
60	52	Integral UK8	343,029	6.13%	11,831	Dec-16				343,029
61	78	McAleer & Rushe	334,073	37.55%	13,386	Dec-17	334,073
62	50	SSE Contracting	330,000	-6.75%	-5,000	Mar-17				330,000
63	54	Byrne	321,657	-2.34%	1,660	May-17	321,657
64	77	Telford Homes	316,241	8.33%	46,308	Mar-18		316,241
65	60	T Clarke	311,200	11.70%	7,100	Dec-17	311,200
66	66	Watkin Jones & Sons	301,914	13.08%	43,278	Sep-17	256,138	19,292		6,126	20,358
67	59	Lakehouse	299,526	-8.46%	-3,053	Sep-17	61,762			230,296
68	72	North Midland Construction	291,770	16.48%	1,004	Dec-17	291,770
69	69	Higgins	290,632	11.61%	6,561	Jul-17	204,225	86,407
70	75	FM Conway	290,234	-1.27%	23,463	Apr-17				290,234
71	65	Carter	286,404	7.05%	8,245	Dec-16	286,404
72	64	Morris Homes	283,651	5.74%	27,618	Mar-17		283,651
73	82	Ogilvie	274,444	24.87%	5,349	Jun-17	142,731				131,713
74	70	Clancy	270,246	5.09%	746	Mar-17				270,246
75	76	Emcor	264,693	10.00%	7,469	Dec-17				264,693
76	58	Spie	262,976	-5.52%	-24,627	Dec-16	262,976
77	79	Severfield	262,224	9.55%	18,055	Mar-17	262,224
78	74	Emerson Developments	252,457	1.56%	71,949	Apr-17		125,653	134,889
79	-	Babcock Rail	251,052	12.78%	12,196	Mar-17	251,052
80	62	Esh	242,738	-11.91%	3,800	Dec-16	173,526	7,402		49,474	3,721
81	84	Stewart Milne	240,549	14.97%	-13,711	Jun-17		188,895			51,654
82	117	J Reddington	239,768	49.76%	10,609	Dec-17	239,768
83	46	Sisk & Son	239,344	-42.93%	-10,937	Dec-16	239,344
84	37	Places for People9	234,192	137.12%		Mar-17		234,192
85	-	MV Kelly	232,973	34.52%	12,145	May-17	232,973
86	89	Cruden Holdings	230,184	22.87%	10,452	Mar-17	160,464	40,088			83
87	73	Rydon	230,128	-7.67%	9,237	Sep-17	151,672	27,435		48,400
88	85	City Building (Glasgow)	219,231	5.18%	-5,640	Mar-17	64,232			121,603	33,973
89	93	William Hare	217,767	21.10%	2,395	Dec-16	217,767
90	94	Fairview (Holdings)	216,389	-27.40%	44,465	Dec-17		216,389
91	105	Seddon	215,748	2.79%	5,300	Dec-17	163,815	51,933
92	-	Michael J Lonsdale	215,325	15.06%	7,073	Sep-17	215,325
93	83	Midas	213,634	-0.99%	1,626	Apr-17	213,634
94	90	Forth Holdings	204,568	9.99%	12,274	Aug-17	139,751			64,626	191
95	96	Henmead	201,345	13.49%	5,973	Dec-16	196,498		12,094	12,093	8,223
96	104	Weston	198,601	28.90%	22,409	Jul-17		198,601
97	88	Mount Anvil	197,985	-21.45%	11,804	Dec-16		197,985
98	100	Wain	194,744	15.95%	42,789	Jun-17		194,744
99	103	Croudace Homes	181,974	8.41%	17,508	Dec-17		181,974
100	95	Briggs & Forrester	181,716	2.40%	5,663	Oct-17	181,716
101	81	United House	180,713	-18.08%	6,378	Mar-17	180,713
102	98	Tolent	178,413	3.01%	3,680	Dec-17	178,413
103	-	Churchill Retirement	177,962	-6.56%	54,198	Jun-17		177,962
104	123	McLeod (Contractors)10	165,663	42.44%	17,974	Nov-16	165,663
105	-	MJ Gleeson	160,384	12.89%	33,012	Jun-17		130,492			29,892
106	-	Sorbon Homes	160,381	3.46%	48,515	Dec-16			160,381
107	124	Hopkins Homes	157,477	35.42%	38,177	Apr-17		157,477
108	115	Hochtief UK Construction	155,053	19.21%	-3,183	Dec-16	155,053
109	-	Erith	152,870	1.92%	10,225	Sep-17	152,870
110	109	Caddick	152,435	2.56%	7,958	Aug-17	92,303		42,459		11,528
111	87	RG Schultz (previously EnServe)	152,400	-24.03%	10,500	Apr-17				152,400
112	121	Beacon Hill	151,661	25.19%	21,878	Dec-16		116,405			35,256
113	116	Lindum Construction Company	149,898	17.16%	7,253	Nov-17	128,353	15,871			5,673
114	-	Novus Property Solutions11	148,553	14.03%	5,441	Dec-17	148,553
115	119	Canary Wharf Contractors12	148,442	18.76%	69,758	Dec-16	148,442
116	122	Gilbert-Ash	148,004	26.15%	1,416	Dec-16	148,004
117	97	Mulalley & Company	147,763	-15.43%	6,259	Mar-17	147,763
118	102	RGCM	147,355	-10.80%	1,414	Dec-16	147,355
119	113	Abbey Developments	147,177	7.33%	45,980	Apr-17		147,177
120	130	Gratte Brothers	145,991	39.80%	1,411	Mar-17	145,991
121	114	EW Beard	144,531	5.61%	4,397	Dec-17	144,531
122	132	Shaylor	143,803	42.60%	6,955	Sep-17	143,803
123	108	Dawnus Construction	143,751	-3.38%	4,036	Dec-16	143,751
124	91	Lorne Stewart	139,947	3.46%	-8,511	Dec-17	139,947
125	126	Stepnell Holdings	138,707	1.45%	762	Mar-17	138,707
126	107	Axis Europe	137,697	-7.84%	7,437	Mar-17				137,697
127	-	One Group Construction	135,518	6.35%	6,905	Dec-16	106,745		1,071		27,702
128	-	CJ O’Shea	132,800	-	20,078	Mar-17	112,588		6,634		13,577
129	110	Masterson Holdings	129,204	-10.25%	10,520	Aug-17	129,204
130	149	Strata Homes	128,509	175.11%	18,866	Jul-17		128,509
131	120	Durkan	124,047	0.69%	4,258	Nov-17	124,047
132	118	Thomas Armstrong	122,984	-3.39%	17,992	Oct-17	35,949				87,036
133	142	Barhale Construction	121,770	50.52%	2,159	Jun-17	121,770
134	112	Simons	119,867	-15.50%	-3,882	Mar-17	107,521		10,052	2,294
135	111	Clugston	118,173	-17.61%	1,039	Jan-17	101,615		504		16,054
136	-	Breheny Group	114,939	41.74%	1,088	Mar-17	114,939
137	150	Spencer	113,204	153.11%	5,408	Mar-17	113,204
138	145	William Davis	106,543	60.40%	13,978	May-17		106,543
139	128	GF Tomlinson	105,102	-13.50%	3,866	Dec-16	101,035				4,066
140	134	Readie Construction	104,923	13.76%	6,005	Mar-17	104,923
141	125	Styles & Wood	104,712	-8.94%	3,540	Dec-16	52,521			52,191
142	-	Jelson	102,769	4.31%	17,643	Apr-17		102,769
143	-	Prater	97,975	-3.67%	5,819	Dec-17	97,975
144	-	Van Elle	94,093	11.75%	9,283	Apr-17	94,093
145	137	Renaker Build	88,537	68.99%	2,782	Oct-16	88,537
146	101	Van Oord UK	87,855	-46.94%	8,971	Dec-16	87,855
147	135	Ian Williams	85,933	-4.41%	4,204	Nov-17	85,933
148	127	Headcrown	85,799	-19.50%	-1,695	Sep-17	85,799
149	139	Clegg	84,222	-0.40%	589	Dec-16	84,222
150	-	8Build	83,956	19.96%	2,126	Mar-17	83,956

Top 20 contractors by contracting turnover

2018	2017	Company	Total turnover £000	Pre-tax profit £000	Year end	Contracting £000
1	1	Balfour Beatty	8,264,000	117,000	Dec-17	6,649,000
2	2	Laing O’Rourke	3,172,500	-66,900	Mar-17	3,172,500
3	6	Keller	2,070,600	110,600	Dec-17	2,070,600
4	5	Kier	4,282,300	25,800	Jun-17	2,019,400
5	8	Costain	1,728,900	38,900	Dec-17	1,728,900
6	13	Skanska UK	1,650,581	23,647	Dec-16	1,650,581
7	7	Mace	2,036,888	23,012	Dec-17	1,632,768
8	17	Bam UK	1,631,328	32,083	Dec-17	1,579,528
9	10	Galliford Try	2,820,200	58,700	Jun-17	1,526,900
10	12	Interserve	3,666,900	-244,400	Dec-17	1,338,700
11	3	Morgan Sindall	2,792,700	64,900	Dec-17	1,332,600
12	17	Wates	1,621,973	32,892	Dec-17	1,320,497
13	18	Willmott Dixon	1,296,414	33,510	Dec-17	1,168,326
14	15	Multiplex Construction	1,155,385	4,213	Dec-17	1,155,385
15	16	Bowmer & Kirkland	928,252	64,440	Aug-17	928,252
16	19	Sir Robert McAlpine13	869,609	-43,200	Oct-16	813,472
17	14	ISG	1,708,800	9,100	Dec-17	772,700
18	-	VolkerWessels UK	870,381	18,911	Dec-17	738,987
19	-	J Murphy	711,900	12,400	Dec-17	711,900
20	-	Lendlease Europe	800,363	41,505	Jun-17	670,628

Top 20 housebuilders by housing turnover

2018	2017	Company	Total turnover £000	Change on 2017	Pre-tax profit £000	Year end	Contracting £000	Housing £000	Property £000	Services £000	Other £000
1	1	Barratt Developments	4,650,200	9.80	765,100	Jun-17		4,589,100	61,100
2	2	Taylor Wimpey	3,965,200	7.86	682,000	Dec-17		3,965,200
3	3	Persimmon	3,422,300	9.10	966,100	Dec-17		3,422,300
4	4	Berkeley	2,703,700	-0.73	934,900	Apr-18		2,703,700
5	5	Bellway	2,558,561	14.19	560,723	Jul-17		2,558,561
6	6	Redrow	1,660,000	20.12	315,000	Jun-17		1,660,000
7	11	Galliford Try	2,820,200	5.61	58,700	Jun-17	1,526,900	1,267,600			25,000
8	8	Crest Nicholson	1,043,200	4.63	207,000	Oct-17		1,043,200
9	7	Bovis Homes	1,028,223	-2.52	114,001	Dec-17		1,028,223
10	10	Bloor Homes	917,705	27.73	152,521	Jun-17		917,705
11	15	Countryside Properties	845,800	25.99	141,700	Sep-17		845,800
12	14	Cala	747,928	27.40	70,445	Jun-17		747,928
13	12	McCarthy & Stone	660,900	3.93	92,100	Aug-17		660,900
14	-	Morgan Sindall	2,792,700	9.02	64,900	Dec-17	1,332,600	473,500	185,900	66,200	734,500
15	17	Keepmoat Homes	423,199	25.70	25,435	Mar-17		423,199
16	16	Kier	4,282,300	4.90	25,800	Jun-17	2,019,400	375,700	182,000	1,688,100
17	-	Avant Homes	368,973	3.43	20,631	Apr-17		368,973
18	-	Telford Homes	316,241	8.33	46,308	Mar-18		316,241
19	20	Morris Homes	283,651	5.74	27,618	Mar-17		283,651
20	13	Places for People9	234,192	137.12		Mar-17		234,192

It’s not what’s included in this year’s Top 150 contractors and housebuilders tables that’s most significant – but what is omitted. A single name sits like the proverbial elephant among the industry’s great and good, casting a shadow over everything else: Carillion. 

In last year’s ranking of the biggest UK construction firms, the collapsed contractor occupied the number two spot, with turnover of £5.2bn, second only to Balfour Beatty. Without Carillion, which went into liquidation in January, the industry is certainly diminished numerically – turnover among the top contractors is down year-on-year by nearly £1bn to £64.5bn. And they appear diminished in other ways too, facing an uncertain economic future at a point when so many questions are being asked about their financial stability.

But it’s not all bad news. The past year saw housebuilders report their fifth year of growth, with turnover, profit and margins all up. As a whole, turnover from the top 150 reached its highest ever level, topping £103bn. But even housebuilders are now squaring up to a more uncertain future, with prices and sales rates stagnating, albeit from a position of strength (see “The housebuilders’ story”, below). 

Major failures concentrate the mind … [following Carillion’s collapse] there is an acknowledgment from all sides that we need to seek a more sustainable future for our industry

Paul Cossell, ISG

For contractors, however, the tables paint a worrying picture, with the top 10 businesses making a pre-tax profit margin of just 0.38% on their £31bn of turnover – that’s less than £120m.

And the tables point to a growing disparity between the biggest firms and those further down the tables that seem able to pull in much healthier margins. So which firms are prospering, which are struggling, and what do the tables say about the industry overall?

Tough times

Carillion’s absence aside, the firms’ ranking by turnover has a familiar look. It’s topped by Balfour Beatty, and many players – such as Barratt, now the second biggest firm, and Kier, now third – have just nudged up one place. 

A few, particularly housebuilders, recorded big turnover increases that allowed them to do better than that, notably Redrow, Bloor Homes and Countryside, which all jumped several spots.

But for those contractors that achieved the same thing, turnover growth appears to have come at the expense of profitability, with Laing O’Rourke’s return to the turnover top 10 accompanied by a loss, and Galliford Try’s by a big fall in profit.

Altogether, the contractors and housebuilders in the top 150 made a combined £6.8bn of profit from £103.5bn of turnover. But the longstanding disparity between the profitability of housebuilders and contractors remains as prominent as ever.

Ultimately contracting feels like hard graft for the return you get. The whole model continues to not feel right

Jan Crosby, KPMG

For the contractors on the list the average margin edged up to 1.7%, whereas housebuilders pulled in 13.8%. And while housebuilders make up less than one-third of the firms in the top 150, they account for 87% of the profit recorded. 

That this position is so bad is in part due to the number of contractors continuing to report the effects of problem jobs. Interserve’s whopping £244m loss on its disastrous foray into energy-from-waste projects sits alongside smaller but still huge reported losses at Bouygues (£78m), Laing O’Rourke (£67m), Amey (£44m) and Newarthill/Sir Robert McAlpine (£43m). In contrast, none of the 18 firms reporting losses are housebuilders. 

Former Kier chief executive Paul Sheffield, now a non-executive director at Dutch contractor Royal Bam, says the losses represent the “tail end” effects of projects picked up in the “very competitive environment” of 2013-14. 

However, there have now been five consecutive years, according to government data, of construction output growth, and for Jan Crosby, managing director at KPMG in the UK, these continued problems indicate inherent weaknesses in the contracting model. 

“Ultimately contracting feels like hard graft for the return you get. The whole model continues to not feel right. How can these margins be sustainable when there are such large levels of risk transfer [to contractors]?”

Of course, market fears are heightened in the wake of Carillion’s collapse – there are still some who worry that a second Carillion-style collapse of a major contracting name is possible. “It’d be wrong to say it can’t possibly happen,” says Kevin Cammack, analyst at financial adviser Cenkos.

Paul Cossell, chief executive of the contractor ISG, which has recovered from recent falls to be ranked 17th in this year’s tables, says: “Major failures invariably concentrate the mind, and I think in this instance there is an acknowledgment from all sides that we need to seek a more sustainable future for our industry. We’re seeing that customers are looking further than just price and really interrogating bids and submissions to ensure that what is proposed is realistically achievable.”

Contractors are getting paid more slowly than ever, while government is now leaning on them to pay their suppliers ever more quickly

Alastair Stewart, Stockdale Securities

At the same time, investors in the sector are calling on contractors to urgently focus on strengthening their balance sheets – something Kier, Interserve and Galliford Try are all focusing on, with debt levels and cash positions being closely watched.

But their ability to manage their cash positions by withholding payments to suppliers is reducing, with major clients such as Network Rail seeking to enforce rapid payment, and legislation in progress that would ban the use of retentions. 

Alastair Stewart, analyst at financial adviser Stockdale Securities, says: “Contractors are getting paid more slowly than ever, while the government is now leaning on them to pay their suppliers ever more quickly. Cash flow is the key issue.” 

The economic outlook, too, provides few reasons to be cheerful. So far this year ONS data has given mixed signals over the health of the construction market, but with the Construction Products Association forecasting stagnation this year and continuing worries over the result of Brexit negotiations, there are reasons to be nervous. 

Brendan Kerr, chief executive of demolition and groundworks specialist Keltbray, ranked 52nd, says: “Everyone knows the market is unsettled, but so far there’s still a sense of hope. You’ve got your umbrella out and know the rain’s coming, but so far the sun is still shining.”

Steve Beechey, group strategy director at contractor Wates Group, ranked 21st, says some are taking a more negative view: “Bidding is tightening up, with people worried about where the work will be the year after Brexit,” he says. “There are early signs of contractors panicking and going in with very low margins.” 

More positive, however, are signs that clients nervous of being left with the next Carillion on their hands are making more use of framework contracts, which give some certainty of workload. 

ISG’s Cossell says: “The trend for 2018 is a strengthening in the volume of framework schemes being considered. There is certainly renewed interest in frameworks, both from a contractor and customer perspective. Frameworks foster collaboration and the sharing of best practice and innovation, and that’s a key pathway we should be steering towards as an industry.”

Dysfunctional

Nowhere is the somewhat dysfunctional nature of contracting more clear than in the inverse relationship between size and profitability. While the biggest housebuilders take advantage of market dominance and economies of scale to deliver sector-leading margins far above their smaller rivals, in contracting the opposite relationship is true. 

The top 10 contractors make just 0.38% pre-tax profit margins, while the top 50 contractors make, at 1.15%, three times as much. Looking at the contractors ranked 50-100, it’s an entirely different ballpark, with these firms reporting a genuinely healthy average margin of 5.2%. This means that these much smaller companies actually make four times as much pre-tax profit on just one-quarter of the revenue of the top 10 firms.

The problem for the big firms seems to be a combination of the difficulty of effectively managing businesses of such scale, the requirement to engage in general contracting rather than develop niche specialisms, and the inherent riskiness of large, complex, multi-year construction projects. 

KPMG’s Crosby says: “Large contracts are inherently more risky propositions. If a job only lasts 12 months, you can procure your suppliers at the point you win it. But if you’ve got a contract that lasts three years, you can’t possibly lock in those costs up-front.”

Certainly, it’s noticeable that, of the very biggest contractors, it’s the likes of Morgan Sindall, Wates, Willmott Dixon – which tend to take on large numbers of small- and medium-sized jobs – that have retained margins of more than 2%. 

Meanwhile megaprojects are often the source of big losses, from Laing O’Rourke’s CHUM hospital in Montreal to the Aberdeen Western Peripheral Bypass that damaged Balfour Beatty, Galliford Try and Carillion.

Moreover, the fact that any reduction in turnover tends to suck cash out of contracting businesses as suppliers are paid makes it very hard to reduce the scale of an operation when the market so demands, tempting firms to bid low to secure turnover. “It’s a big mouth to feed, and it’s really tricky to manage,” says Crosby.

All of which hardly sounds like the world-beating industry heralded in the government’s recent sector deal for construction. Instead, low profit has meant low investment in innovation. 

“The government is right to push on offsite manufacturing,” says Wates’ Beechey, “but how can firms invest when they’re on such slim margins? The question is whether the industry needs to go through some sort of a reset.” 

ISG’s Cossell, for one, thinks it’s possible: “The future of our industry rests on our ability to generate consistent and sustainable returns for the work we deliver, and tier-one contractors need to lead by example. 

”It’s about technological innovation and adoption, smarter ways of working, enhanced operational efficiencies and the people we employ. It’s also about open and honest conversations about risk, capability and capacity.”

Whether that can actually be achieved is much harder to foresee.

The housebuilders’ story

BONUS DATA:

Top 10 housebuilders’* profit per house sale

Housebuilder	Average selling price	Homes sold	Pre-tax profit per home sold
Barratt Developments	£313,100	17,395	£47,387
Taylor Wimpey	£264,000	14,541	£57,328
Persimmon	£213,321	16,043	£60,219
Berkeley Group	£715,000	3,536	£220,475
Bellway Plc	£260,400	9,644	£59,265
Redrow Group	£309,800	5,416	£59,453
Galliford Try	£354,000	3,890	£47,609
Crest Nicholson	£340,000	2,935	£72,095
Bovis Homes	£272,400	3,645	£35,125
Bloor Homes	£300,000	3,023	£52,002

*Housebuilders ranked by overall turnover

Aggregated data for housebuilders

	Turnover - Most Recent	Turnover - Previous	Pre-tax Profit Latest	Average margin
All housebuilders	£43,560,176,792	£39,764,331,891	£5,997,157,795	13.77%
Top ten	£24,769,289,000	£22,835,012,000	£4,756,045,000	19.20%

Aggregated data for contractors

	Turnover - Most Recent	Turnover - Previous*	Pre-tax Profit Latest	Average margin
All contractors	£64,500,431,472.00	£65,305,647,142.00	£1,093,821,132.00	1.70%
top 10	£31,324,197,000.00	£35,105,076,000.00	£118,442,000.00	0.38%
top 50	£55,561,430,131.00	£57,093,425,546.00	£637,523,112.00	1.15%
Ranked 50-100	£8,411,778,894.00	£7,642,743,687.00	£437,819,247.00	5.20%

* turnover for previous year includes Carillion turnover, despite not being on this year’s list

 

Methodology

This Top 150 construction company analysis refers to those companies identified by Hewes & Associates as the Top 150, which have results available for 2017/18, and which are housebuilders, building and civil engineering contractors, building fit-out contractors, M&E, and FM/building/civil engineering or maintenance companies. 

Larger companies whose 2017/18 results are not yet available have been included  with their 2016/17 results, while smaller companies in such a position have not been included. 

Turnover includes joint ventures. Ranking comparisons have been affected by the inclusion of companies that were not included in last year’s rankings, and owing to revised methodology, and some cases where there have been changes in corporate reporting, such as a different year end, comparators on figures published last year are not always possible. 

Data compilation and analysis was undertaken by Hewes & Associates, to which any queries on the data should be directed: 01428 641518, hewesinfo@aol.com or at www.hewes-associates.com

Notes

¹ Multiplex Construction changed name from Brookfield Multiplex (renamed in 2017)

² Engie figures include Engie FM and Keepmoat Regeneration, acquired by Engie UK on 1 March 2017; Engie FM has year end  of Dec 2016, Keepmoat Regeneration has March 2017

³ J Murphy 2017 results taken from press release

⁴ McLaughlin & Harvey owns Barr & Trench, included in these data 

⁵ Keepmoat Homes disposed of regeneration business in 2017

⁶ Buckingham Group Contracting 2017 data are from draft accounts

⁷ Hill Holdings; Partnerships used last time

⁸ Integral UK is now owned by JLL

⁹ Places for People profit data not available 

¹⁰ McLeod (Contractors) data refers to

2016 accounts

¹¹ Novus Property Solutions is owned by the Seddon family, but not part of Seddon Group and so listed separately

¹² Canary Wharf Contractors – no cost of sales data for 2017

¹³ Figures for Newarthill, the parent company of Sir Robert McAlpine