Bedford-based contractor SDC Holdings has improved its profit margin despite falling turnover amid difficult market conditions.
Pre-tax profit rose by a third from £5.4m to £7m in its latest accounts for the year to 30 September 2025, although revenue dipped by 4 per cent from £247.7m to £238m.
Higher profit and lower revenue meant the firm’s margin broadened from 2.2 per cent to 2.9 per cent.
The accounts showed three sectors each contributed more than £50m to SDC’s latest turnover figures: education and technical facilities; commercial and leisure; and student accommodation.
But “the level of enquiries has reduced considerably over the past few months”, director Andrew Mitchell said in his strategic report with the accounts.
“The most notable decline is in developer-led schemes, which we believe reflects the wider economic challenges facing the country.”
However, he added that SDC continued to benefit from a “loyal” client base and the firm envisages “ongoing opportunities in both the motor industry and the Oxbridge universities/colleges”.
Project completions in the year included the £40m Optic office and laboratory facility at Peterhouse Technology Park in Cambridge, for British Land.
SDC also completed the £26.5m Brooklands zero-carbon business campus in Cambridge for M&G Real Estate.
Mitchell said the contractor experienced “only limited inflationary pressure, mainly on certain material elements” in the period covered by its latest accounts.
“Given the reduced market activity, we expect to see some downward movement in prices over the coming months as suppliers’ workloads fall,” he added.
Cash at hand eroded from £41.8m to £38.5m, and the firm held no bank loans or overdrafts.
No shareholder dividends were paid out. SDC has operated under an employee benefit trust model since 2007.
The firm was ranked 77th in the latest CN100 table of top contractors by turnover.
Its annual wage bill rose from £23.9m to £24.2m, although SDC Holdings employed a monthly average of 362 staff in the year, down from 373 in its previous accounts.
“In these challenging times, more of our staff have faced a range of personal and professional difficulties, and we have intensified our efforts to provide them with appropriate support,” the latest accounts stated.
SDC said it had a strong order book but “the overall market has weakened”.
As the group’s construction business and main trading arm, SDC Builders Ltd has secured £200m of business for the current financial year and £76m for 2026/27. In its previous accounts, SDC said it had secured orders worth £78.6m for 2025/26.
Looking ahead, it warned that enquiry levels “are currently poor although we are aware of some larger schemes likely to be coming to the market early next year which we will target”.
Major contractor failures “and the intense competitiveness of the industry continue to put pressure on the supply chain, which in turn presents a risk to SDC”, it added.
Unless the UK economic outlook improves, “we consider a reduction in turnover in the following year to be a realistic possibility”, Mitchell said.
“While we remain vigilant in our selection of suppliers, the potential failure of a key supplier cannot be entirely eliminated.
“To minimise this risk, we carefully assess all major orders before appointment and maintain strong, long-term relationships with the subcontractors we employ.”
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Ben Vogel