McLaren on course to return to pre-covid profit levels

Grant Prior 2 weeks ago
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Profits at McLaren Construction are set to recover to pre-covid levels this year following a string of major work wins as the industry continues its recovery.

Recently completed projects include the new Leicester City FC training ground
Recently completed projects include the new Leicester City FC training ground

The contractor published its latest results today revealing the impact of the pandemic and the cancellation of an infrastructure contract which caused an exceptional charge of £19.4m.

The exceptional charge resulted in a pre-tax loss for the year to July 31 2020 of just over £13m compared to a pre-tax profit of £3.5m last time on turnover down to £525.8m from £650.8m.

McLaren’s property division recorded a strong performance during the year thanks to continuing success in the student accommodation sector which resulted in a £13.7m profit allowing the group to record overall profitability of £0.7m across its property and construction companies.

Chairman Kevin Taylor said workloads were now picking up strongly as he paid tribute to colleagues for their work absorbing the impact of the pandemic.

He said: “It’s a measure of the resilience and health of the business that we can emerge strong from the pandemic. We are proud and appreciative of all our colleagues, support teams and supply chain who worked tirelessly to keep our schemes on track for our valued customers. We are particularly grateful for the continued support of our customers.

“The roll out of the vaccine gives us great confidence that the worst is behind us, and we forecast 10% revenue growth in 2020/21, and an even better performance in 2021/22 driven by the residential, office, industrial and logistics and healthcare sectors.

“We are committed to the national effort to build back better and to leave a positive legacy, improving the lives of local people at the same time as delivering the homes, employment spaces and facilities they need, while delivering our commitment to a net zero strategy.”

Taylor said 95% of turnover has been secured for the current financial year end to July 2021 with revenue forecast to grow to over £600m and profitability to return to pre‐covid levels.

The Enquirer understands that over the last six months McLaren has secured positions on 27 projects with a total value of £1.2bn across key sectors including commercial, hotels, residential, industrial and education.

McLaren Construction’s cash position at the end of the year was £38.9m with no external debt or long‐term borrowing.

A £5m investment into the business has also been made by shareholders to support future growth and integration of construction and development resources in the residential sector, alongside investments into quality control and digitisation.

The company has secured places on 14 frameworks, including new central government construction frameworks from CCS and NHS Shared Business Services, in addition to development partnerships secured with both local authorities and registered providers by residential arm McLaren Living.

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