{"id":824760,"date":"2025-02-06T07:11:45","date_gmt":"2025-02-06T13:11:45","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/02\/06\/profit-doubles-but-mclaren-misses-1bn-turnover-target\/"},"modified":"2025-02-06T07:11:45","modified_gmt":"2025-02-06T13:11:45","slug":"profit-doubles-but-mclaren-misses-1bn-turnover-target","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/02\/06\/profit-doubles-but-mclaren-misses-1bn-turnover-target\/","title":{"rendered":"Profit doubles but McLaren misses \u00a31bn turnover target"},"content":{"rendered":"
\n

Tier one contractor McLaren missed its \u00a31bn turnover target last year, despite almost doubling its profit and margin.<\/p>\n

Group pre-tax profit in the year to 31 July 2024 totalled \u00a311.9m compared with \u00a36.3m the year before, although turnover fell by 4 per cent to \u00a3924m.<\/p>\n

The latest revenue total was still 23 per cent higher than 2021\/22 (\u00a3751.6m) and 71 per cent higher than the 2020\/21 figure of \u00a3541m.<\/p>\n

And despite the latest turnover decrease, McLaren\u2019s higher profit meant the firm\u2019s margin broadened from 0.7 to 1.3 per cent.<\/p>\n

In accounts released this morning (5 February), group chief executive Paul Heather said the results were \u201cin line with expectations\u201d as the construction industry regained stability after \u201cchallenging market conditions\u201d in previous years.<\/p>\n

McLaren was the 23rd largest UK contractor in the most recent CN100 rankings<\/a>, and Heather predicted last year<\/a> that the firm would join the \u00a31bn-turnover club in 2023\/24.<\/p>\n

Speaking to Construction News<\/em> about the latest results, he attributed the slight shortfall in revenue to project delays rather than lost business opportunities.<\/p>\n

\u201cSome of the preconstruction service agreements we had in place were due to convert into lump sum prices, but these took longer than expected and moved into the following trading year,\u201d he explained.<\/p>\n

\u201cAdditionally, some residential schemes were impacted by the Building Safety Act and gateway two requirements, affecting timing.<\/p>\n

\u201cHowever, none of this work has disappeared, and we anticipate exceeding \u00a31.1bn in turnover for 2024\/25.\u201d<\/p>\n

Group chairman Kevin Taylor said that repeat business remained a cornerstone of McLaren\u2019s strategy, with 74 per cent of turnover in the latest accounts coming from long-standing clients such as Landsec, British Land and Argent.<\/p>\n

Major contract wins in the year included the \u00a3200m refurbishment at Thirty High in London for Landsec (pictured) and the \u00a3132m refurbishment and repurposing of 318 Oxford Street for Publica Properties Ltd<\/a>.<\/p>\n

The contractor said these wins helped pave the way for the creation of a new construction management division in August 2024.<\/p>\n

Heather credited the near-doubling of McLaren\u2019s pre-tax profit to a proactive approach to inflation management and supply chain coordination.<\/p>\n

\u201cWorking closely with our supply chain allowed us to lock down design and pricing at the earliest possible stage, preventing cost escalation. Additionally, our overheads remain lean, ensuring we maintain competitive profit margins,\u201d Heather said.<\/p>\n

Taylor noted that previous financial years were impacted by Covid-related challenges and hyperinflation, but those headwinds had now largely subsided. \u201cThe business has stabilised, and our disciplined approach to cost control is paying dividends,\u201d he added.<\/p>\n

Net cash reserves fell from \u00a392.8m to \u00a367.3m and the firm paid no dividends.<\/p>\n

McLaren held no bank loans, and it was able to halve the amount it owed suppliers in retentions from \u00a327.9m to \u00a313.2m.<\/p>\n

The firm\u2019s average monthly staff headcount stood at 912 employees, up from 861 the year before.<\/p>\n

Looking ahead,\u00a0McLaren is targeting expansion into new regions and sectors. Heather said that the new Yorkshire & North East division, which was set up in 2023\/24, \u201cwill contribute significantly to revenue growth\u201d.<\/p>\n

Data centres and regeneration projects are seen as key growth areas. \u201cWe now have a place on 22 frameworks, giving us greater access to public sector work. Data centres are an increasingly important sector for us, and our regeneration division is securing major contracts, including the \u00a3100m-plus recladding of the Chalcots Estate<\/a> [in Camden, London],\u201d said Taylor.<\/p>\n

Healthcare is another important sector for McLaren. It highlighted the completion in late 2024 of an upgrade at the Queen Elizabeth Hospital for Lewisham & Greenwich NHS Trust.<\/p>\n

This completion \u201cpositions McLaren well as the government confirms funding for the New Hospital Programme and Private Finance Initiative investors start the process of handing back hospitals as contracts expire\u201d, the contractor stated.<\/p>\n

Despite its strong position, McLaren acknowledges potential industry challenges. \u201cThere are always economic uncertainties, and we\u2019re closely monitoring inflationary pressures and public sector spending,\u201d Heather said.<\/p>\n

The rise in employers\u2019 national insurance contributions<\/a> from this April is \u201csomething we have to manage, but it will impact budgets across the sector\u201d, Taylor added.<\/p>\n

McLaren is also keeping a watchful eye on the life sciences market.<\/p>\n

Heather said activity has slowed here. \u201cWe were expecting more opportunities in this space, but some projects appear to be on hold due to cost concerns. However, we remain committed to the sector,\u201d he said.<\/p>\n<\/div>\n

Read More<\/a>
\n Ben Vogel<\/p>\n","protected":false},"excerpt":{"rendered":"

Tier one contractor McLaren missed its \u00a31bn turnover target last year, despite almost doubling its profit and margin. Group pre-tax profit in the year to 31 July 2024 totalled \u00a311.9m compared with \u00a36.3m the year before, although turnover fell by 4 per cent to \u00a3924m. The latest revenue total was still 23 per cent higher<\/p>\n","protected":false},"author":1,"featured_media":824761,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2807,23002],"tags":[],"class_list":{"0":"post-824760","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-doubles","8":"category-profit"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/824760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=824760"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/824760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/824761"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=824760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=824760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=824760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}