McAlpine raises contracting margin to record 4.6%

Aaron Morby 13 years ago

Sir Robert McAlpine lifted contracting operating margins to an industry-beating 4.6% last year.

The London Olympic Stadium builder beat 2009’s construction margin high of 3.5% despite seeing an overall fall in both turnover and profits.

According to results posted for Newarthill, Sir Robert McAlpine’s private holding company, group-wide pre-tax profits fell nearly nearly a third to £27.4m on a like for like basis with the previous year.

Newarthill turnover also slid by a similar amount from £1bn last time to £707m.

But the contracting arm managed to put in a strong profit performance after bearing the brunt of the sales fall from £1bn in 2009 to £674m.

McAlpine recently completed its largest project, the 80,000-seat London Olympic Stadium, on time and within budget and will also benefit from returns in its new financial year from the job

    Performance by activity

    Contracting: turnover £674m (£1,016m) op profit £30.8m (36.3m)
    PFI: turnover £95.6m (£109m); op profit £17.3m (21.8m)
    Property: turnover £9.6m (£7.0m) op loss -£8.9mm (-£5.7m)

In a statement for the annual results ending October 2010, the family-controlled company said: “In a demanding year the construction division continued its strategy of pursuing work only where margins adequately reflected the inherent risks of the project.

“The outcome of this approach is another profitable year and confidence that the division will continue to trade profitably.”

McAlpine said it had seen an upturn in work opportunities at the end of last year which would see an increase in turnover and order book in 2011.

Significant contract awards include Milton Court and 62 Buckingham Gate in London and a new centre for American Express in Brighton.

Nearly a third of total staff left McAlpine over the trading year taking employees down to around 2,000.

Much of the fall in total numbers of staff came from the discontinuing of its wind renewables business back at the end of 2009.

The highest paid director took a pay rise of 73%, taking total pay and bonuses to £1.7m.

McAlpine is trading with a substantial cash balance of £228m.

But it managed to keep its payment record up to scratch paying subcontractors and suppliers within 31 days on average.

The firm made no party political donations this year after a £95,000 payment in 2009.

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