HG Construction profit jumps 50% to £25m

The 21% jump in revenue to £243m stoked up pretax profit, which soared nearly 50% to £25m, even against the backdrop of disruption and added costs caused by the pandemic.

Group chief executive Christopher Benham said the business would expand further this year on the back of a strong balance sheet and a record level of secured turnover.

The business, which was formed 23 years ago when the management team acquired HG Construction from the original Hunting Gate building business, has prospered in recent years on the back of large multi-storey housing and student accommodation projects.

HG Construction five-year view
2021 2020 2019 2018 2017
Revenue £243m £202m £150m £152m £126m
Pre-tax profit £24.9m £16.7m £11.7m £11.3m £8.6m
Op profit margin 10.2% 8.3% 7.8% 7.4% 6.8%

Benham said that the focus on self-delivered growth with inhouse resources including groundwork, M&E Services, owned plant and piling divisions allowed the management to focus on cost certainty and flexibility when deploying resources.

Contract profit margin reached 9.4% last year although Benham warned in newly published accounts that group margin would be impacted by substantial market cost movements affecting labour and materials.

The strong performance in 2021 also saw cash reserves rise by nearly a fifth to £48m.

On the back of the growth, HG Construction Group launched HG Living in March.

The new property development company is targeting purpose built student accommodation, build to rent and affordable housing schemes.

One of HG Living’s first schemes is an £80m build-to-rent scheme for Pension Insurance Corporation in central Milton Keynes.

HG Construction will be the main contractor on the scheme, which comprises 306 residential apartments along with associated amenity space.

Benham said: “We launched HG Living after several years’ work behind the scenes to grow the development arm of the HG Group under HG Developments.

“We have established a solid track record in managing the construction and development risk for our funding partners, providing a seamless end-to-end service and delivering quality residential schemes with certainty.”

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