McLaughlin & Harvey has reported an £8.6m pre-tax loss, which it blamed on macroeconomic conditions and problem jobs.
In the 12-month period to 30 June 2023, the County Antrim-based firm turned over £736.6m but delivered a margin of -1.2 per cent amid loss-making projects, inflation and labour supply issues.
The company’s previous accounts, which covered 18 months, reported a revenue of £799.6m and a pre-tax profit of £3.2m. This extended accounting period helped the firm to rise 11 places to 25th in the CN100 2023 table of top contractors.
In a strategic report accompanying the new accounts, directors said they were “disappointed with the performance of the group throughout the financial year”.
They cited volatile trading conditions, caused by the lingering impact of Covid-related delays, geopolitical turbulence on prices, supply-chain availability, and UK labour shortages as the main underlying reasons.
In particular, they acknowledged “potential losses” on an undisclosed number of small jobs, mainly in London and the South East, that have been “significantly affected by the severe inflation encountered after the group had entered into contract”.
McLaughlin & Harvey is working with clients to “minimise the financial impact of these loss-making jobs and to recover the provisional losses provided for in the accounts”, the directors added.
Despite the loss, the company still paid out dividends of £2.2m compared with £2.1m in the year before. Directors said the firm has a “pipeline of profitable work with reputable and reliable clients” going forward, citing participation in frameworks organised by Scape, Pagabo and the NHS’s ProCure23.
Construction was responsible for 92 per cent (£677.2m) of turnover in McLaughlin & Harvey’s latest financial year, with wholesale distribution and operation of landfill sites accounting for the rest. Contract wins in the period included a £55m deal to build a hangar at Farnborough Airport and The Grid office development in Glasgow.
McLaughlin & Harvey has no loan debts and ended the 2022/23 financial year with £113.3m of cash in the bank, up from £85.6m the year before. The firm increased its average monthly headcount from 791 employees in 2021/22 to 816 the following year.
The directors said that they “anticipate a much more positive financial performance in the coming year” based on a strong order book. Last November, for instance, McLaughlin & Harvey won the main-build contract for the City Learning Quarter project in Wolverhampton.
