GMI boosts profit as it slashes turnover

Profit has edged up at GMI Construction as a strategy of “controlled consolidation” saw turnover drop by almost a third.

The Leeds-headquartered contractor, which operates in the North of England and the Midlands, adopted the strategy in 2023 following a loss-making year.

In its latest published accounts, for the year to 30 September 2024, group revenue fell to £232.4m from £328.4m in its prior year. Pre-tax profit rose to £1.15m from £970,000.

In a statement with the results, GMI chair Jarrod Best said: “The group has delivered a strong financial performance by fulfilling its strategy of ‘controlled consolidation’, focusing on profitable opportunities that deliver real bottom line improvement.

“This approach resulted in a reduction in turnover of 29 per cent from the previous year, but more importantly, helped deliver improved profitability.”

In results for its previous period, the firm said that, under the strategy, it was applying tough stress tests to the financial risks of the projects it would take on.

In the latest statement, Best said it would continue to target “stable and controlled growth for the future financial years, applying the rigour and stress tests developed over recent years to carefully consider risks on projects”.

GMI underwent rapid growth over a short period, with its turnover rising from £63.3m in 2017 to £132.1m in 2019 before hitting £360.3m in the year ending 30 September 2022. But in 2022 it made a £2.2m pre-tax loss.

Its latest accounts showed it increased its cash at bank to £19.9m from £10.6m in 2023.

The accounts added that it was working to increase the proportion of its projects delivered through frameworks.

Wins in the period covered by the accounts included a place on the University of Manchester’s £260m construction works framework.

It also landed Rialto, a £50m purpose-built student accommodation scheme in York (pictured), and a £32.9m logistics park in Birmingham called Urban 8.

In July it was announced that GMI chief executive Lee Powell was leaving to become managing director (MD at Henry Boot.

Midlands divisional MD Gareth Jones was promoted to lead GMI in October, stepping up into the new role of group MD.