Problem job sees Multiplex profit slump to £4.4m

Aaron Morby 6 months ago
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Profits at London tower builder Multiplex Construction slumped from nearly £16m in 2016 to £4.2m last year.

One Nine Elms contract is worth over £600m

In latest accounts for 2017, Multiplex said an improved performance from higher margin projects had been hit by reduced margins on a single challenging project that will be completed this year.

Revenues edged up by around 10% to a record £1.1bn as further major orders got underway.

Multiplex revealed it had made a cost provision of £10m for recoveries that were not certain in amount and timing.

The firm has now focused on a more selective bidding strategy concentrating on its core office high-rise market.

It also said it had aligned itself with more financially robust supply chain partners to limit the risk of subcontractor failures after being hit by concrete frame specialist Dunne’s collapse.

Multiplex: Last five years
2017 2016 2015 2014 2013
Pre-tax profit £4.2m £19m £22m £5m £11m
Revenue £1155m £1036m £620m £284m £295m

Ross Ballingall, managing director of Multiplex Construction, said the outlook for work in the capital remained good even amid on-going political uncertainty.

“Office space in London remains in demand, as does high-end and ultra high-end residential, resulting in a healthy pipeline for new work beyond secured projects.”

During the year Multiplex secured and started on three major London schemes.

The largest at One Nine Elms is a twin tower residential and hotel project worth over £600m.

In the same area it is building the Jenga Tower for £240m and in London’s Royal Docks Multiplex is contracted by Chinese developer ABP to deliver the first phase worth £217m of a multi-phase commercial and residential scheme of 4.6m sq ft.

These major project wins saw the year-end order book rise to £4.2bn from £3.6bn. This presently comprises 12 residential projects worth £2,2bn and five commercial projects worth £1.7bn.

Seven projects valued at £660m were completed in 2017.

As revenue and orders increased headcount rose 9% over the year to just over 1,000 staff, including a number of graduates as it introduced its first apprenticeship scheme.

Retention held by Multiplex’s clients rose to £75.5m (2016: £63m) with around £40.5m due in the year ahead.

The highest paid director received £499,000.

 

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