Profit up at HG Construction as consolidation pays off

Profits have surged by almost 50 per cent at HG Construction following a major corporate restructure and a strategic turnaround to prioritise consolidation over growth.

Pre-tax profit at the Hertfordshire-based contractor rose from £6.4m to £9.5m last year, while turnover dipped from a record £424m to £387m, according to the firm’s latest financial results.

Its annual report and financial statements for the year ending 31 December 2024 showed the shift in direction starting to bear fruit as the firm sought to bolster its long-term resilience in the face of regulatory upheaval.

The implementation of the Building Safety Act was a particular cause of strain, it said, with the legislation causing “significant disruption and complexity” in its initial stages as the industry was left to grapple with the new approvals process and compliance requirements.

“This challenge was compounded by the resourcing constraints faced by the newly appointed regulatory bodies, leading to widespread delays and heightened uncertainty,” said chief executive Adam Quinn.

“Consequently, commencement of new projects slowed noticeably, raising concerns about future revenue stability across the sector.”

However, he said the firm achieved a robust financial position and healthy pipeline despite the challenges posed by regulatory reform.

“We viewed this evolving environment as the ideal opportunity to strengthen our internal foundations to ensure that the business is well-positioned for sustainable delivery and continued excellence in project execution,” he said.

“With our previous growth targets successfully met, we redirected our efforts towards
stabilising turnover and strengthening our internal structures and capabilities to build long-term resilience and sustain high performance.”

That decision resulted in a modest reduction in turnover but a significant improvement in profitability, Quinn said.

During the period the company’s wage bill rose from 18,304 to 20,976 and it saw its number of employees increase by a third to 292.

It also had £34,041 cash in hand.

Last year saw the creation of an operational board to drive up efficiency as well as a string of new appointments across the firm’s construction, preconstruction and commercial teams and the addition of dedicated regional directors.

It completed its top-tier shake-up with the appointment of Greg Purkiss as managing director earlier this year.

HG Construction, which climbed to number 47 in last year’s CN100, was established in 2000 following a management buyout of Hunting Gate, a Hitchin-based contracting firm with a turnover at the time of £27m.

Among its contract wins have been a 37-storey student accommodation scheme in Manchester (pictured) and a £69m build-to-rent scheme on a former car park in Leeds.