Modular specialist in profit after providing classrooms to RAAC-hit schools

Offsite specialist McAvoy Group returned to profit after providing temporary buildings to schools hit by the RAAC crisis.

Accounts for the year to 31 May 2024 show the firm’s pre-tax profit rose to £217,600, up from a £712,700 loss in its prior year.

Turnover soared to £75.5m in the period, up from £59.4m.

The company, which is headquartered in County Antrim, Northern Ireland, highlighted its provision of long-term rental projects in the education sector providing “urgent replacement accommodation for schools” as being the main driver of its growth.

In September 2023, the Department for Education (DfE) ordered more than 100 schools to close or partially close their doors due to the presence of reinforced autoclaved aerated concrete (RAAC) and the risk it was believed this posed to safety due to the material’s expired lifespan. Thousands of pupils were then taught in temporary classrooms and modular buildings.

Data obtained by Construction News under the Freedom of Information Act showed that the McAvoy Group was paid £36.3m by the DfE for work in England in the 2023/24 financial year – which ran until 5 April 2024.

This was a sharp increase from the £9m it received in the 2022/23 financial year, and saw it rise to become the department’s 11th biggest contractor, up from 15th previously.

As well as temporary classrooms, McAvoy also completed the largest project in its history for the DfE in its accounting period, the 1,200-pupil Orsett Heath Academy in Essex.

Other work completed in the year were repeat projects for the Queen Elizabeth Hospital King’s Lynn NHS Foundation Trust and a facility for vulnerable children in Leyton, East London.

A McAvoy joint venture with Kier landed places on frameworks including a £10bn offsite construction solutions framework for the Crown Commercial Service and a £2bn Ministry of Defence accommodation framework.

The firm also received a £1.1m tax credit for research and development work carried out in the period, its accounts show.

McAvoy chief executive Ron Clarke said he was pleased with the results and added: “We anticipate significant growth in the modular market as demand increases for cost effective sustainable buildings that are flexible, quick to deploy and cost effective.”

A raft of modular specialists have struggled in recent years with many collapsing, including the likes of Ilke Homes, Mid Group, Eco Modular Buildings and Caledonian Modular.