Sir Robert McAlpine has seen profit pick up, following a year of loss.
The construction and civil engineering firm reported a profit of £9.18m for the year of 2020-2021. This does not include the £0.2m cost after the firm decided to exit construction for energy from waste facilities.
The recovery in profits comes after the firm saw a loss before tax of £26.8 m in 2020 which was due to litigation around work on defects on older projects. The contractor turned over £937.1m in its latest accounts, compared with £819.5m last year. Although this is a jump from the previous year, it is still short of the £1bn revenue reported in pre-pandemic 2019.
The contractor’s recovery was also reflected in its cash balances, which rose from £96.7m in 2020 to £106.2m in 2021.
COVID-19 continued to factor in the results of 2021. The firm used £3.9m on COVID-19 provisions in 2021, which was counted as employee costs and onerous lease charges. As of 31 October 2021, the firms’ total provisions stood at £24.3m, which was largely due to remedial work to replace cladding.
Chief executive Paul Hamer (pictured) attributed the recovery to the resilience of the firm’s business strategy that helped the contractor to “evolve” and respond with flexibility to the current market. Hamer said pressures had been felt by geopolitical shifts and market volatility.
Some of the risks identified for the future include inflation, building defects, the legislative requirements of the Building Safety Bill, cyber security threats, safety on site and the pandemic’s toll on mental health. The firm also listed the retention of quality employees as part of the risk in the year to come. The number of employees dropped from 2,247 in 2020 to 2,158 in 2021.
McAlpine’s chief financial officer Leighton More said that the strong recovery at the end of 2021 had positioned the firm well for the new financial year. He confirmed £1bn of work in the pipeline, with a further £946.1m work nearly secured or already secured. Some of the major projects include Shepperton Studios in Bristol and the Gradle Quadrangles at the University of Oxford.
“This level of turnover visibility provides a strong underpin for the business in the medium term, enabling us to be more selective in our work-winning activities in these current uncertain geo-political and macro-economic times,” said More.