Murphy profit soars despite revenue fall

Aaron Morby 4 months ago
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Murphy chief executive Steve Hollingshead has completed his first full-year at the contractor with pre-tax profit ahead almost 70% to £23m.

The financial success last year builds on the return to profit in 2015, after a £9m loss in 2014 following a problem contract on a fat-fired combined heat and power project in East London.

Hollingshead has set the target of doubling turnover to £2bn by 2025. As part of the business’ strategy, Murphy wants to improve profitability across a portfolio of products to at least 5% before tax, growing to 10% by 2025

While pre-tax profits recovered strongly, turnover slipped for the third consecutive year to £614m due to Crossrail works completing in 2015 and reduction of activity in other parts of the UK business.

Murphy ended December 2016 with a cash balance of £97m and net assets of £214.1m.

The group order book stood at £1.2bn compared with £962m in 2015, an increase largely due to winning one of the blocks of HS2’s enabling works. This will be worth £175m to the group.

The firm said with the size and visibility of the pipeline it was confident of delivering its budget for 2017.

But finance director David Burke warned: “The picture is less certain for 2018; there are signs that certain projects will be delayed, particularly in the South East.”

Hollingshead, said: “We can look back on 2016 with considerable pride. It was a year when we overachieved against our financial goals and I’m proud that Murphy and our people continued to deliver.

“Our ten-year plan is about sustainable growth and taking Murphy to the next level. But this is not simply a set of target numbers and a determination to hit them. The plan is like construction itself – making sure that every part of our business is professional, rock-solid and able to support the ambitious plans we have for our development.”

The year saw significant wins – as well as securing enabling works for HS2 in joint venture with Laing O’Rourke, Murphy was named preferred bidder on the tunnelling element of the £2.4bn York Potash mine with Hochtief, and the Canadian business Surerus-Murphy built an order book worth $400m.

 

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