Logistics specialist Glencar has increased its pre-tax profit in its latest financial results, following a more selective approach to tendering.
Releasing its latest annual accounts this morning (27 January) for the year to 30 September 2024, the St Albans-based contractor said that pre-tax profit rose by 30 per cent from £3.3m to £4.3m.
However, turnover dropped for the second year in succession. After peaking at £417.8m in 2022 – marking a rapid ascent from £144.8m in 2020 and £160.7m in 2021 – Glencar’s revenue slipped to £400.6m in its 2023 financial year and £400.3m in its new accounts.
The firm was ranked 53rd in the CN100 2024 table of top contractors.
Explaining the reasons behind the improved margin and flatlining turnover, the accounts described 2024 as a year of “balance” as Glencar adapted to “rapidly evolving and changing customer expectations and the needs of the market”.
Speaking to Construction News, finance director Tom Tutty said the firm adopted a more selective approach to tendering, focusing on pricing fewer projects more strategically. This reduced risks and contributed to improved profit margins, he said.
“As we mature [as a company], one of our focuses is trying to price less, but price it better…. If we’re pricing the same amount of work as we had been three years ago, I’m sure our turnover would have been higher, but I’m not necessarily sure our margin would have been higher.”
Glencar co-founder Chris Gleave said the contractor had navigated the inflationary pressures on materials and availability issues faced by the construction industry in the previous year.
“We seem to have washed through all of that, and that doesn’t seem to be coming back to haunt us,” he noted, adding that the firm has no struggling projects to affect its bottom line.
Tutty said that Glencar had strategically diversified into higher-margin sectors such as data centres and life sciences.
At 1.2 per cent, Glencar’s margin was “definitely still lower than we wanted to be”, Tutty said. “The ambition would be to double or triple that… I think that will only be achieved via selective tendering and new sectors.”
Within the logistics market, Gleave outlined new possibilities with “last mile delivery” in city centres, and also mentioned that Glencar was interested in the cut and carve refurbishment market.
In its latest accounts, the firm revealed it was free of short- or long-term repayable bank loans, and cash at hand doubled from £21.7m to £43.8m.
It did not pay out a dividend, compared with £2.2m the year before.
Average monthly headcount was up from 270 to 291 employees, and Glencar’s wage bill rose by 20 per cent from £18.5m to £22.2m.
Repeat business accounted for 65 per cent of Glencar’s turnover last year, but Tutty said the proportion was lower this year as the number of first-time clients increased.
One of these was Churchmanor Estates, which appointed Glencar to replace collapsed contractor Readie on a life sciences building job near Cambridge.
Looking ahead, Tutty said that Glencar aims to achieve turnover of £440m in the current year, but prudence is the watchword.
“We don’t just want to put all our eggs in one basket and then catch a cold,” he said.
Glencar’s holding company also released its results today, revealing turnover of £406.8m, up slightly from £405.9m the year before.
Pre-tax profit more than doubled from £2.2m to £4.8m.
Commenting on these results, Glencar chief executive Eddie McGillycuddy said: “We have already secured a robust order book of £350m for 2025, with strong project margins.
“We are targeting 10 per cent revenue growth in the next financial year, followed by 10 per cent in the following year.”
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Ben Vogel