McLaren set for 拢1bn turnover as firm returns to profit

By Dave Rogers2024-02-07T07:00:00+00:00

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Contractor breaks into Tier 1 club with surge in income

McLaren has said it will break the 拢1bn turnover barrier this year as the firm cements its status as a Tier 1 contractor.

Construction group chief executive Paul Heather said the contractor was working on a broad range of projects and was not specifically targeting jobs in the Tier 1 market.

He added: 鈥淲hile winning and delivering top tier projects is in McLaren鈥檚 DNA, we are also staying faithful to our roots by continuing to work on smaller contracts.

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Paul Heather (left) and Kevin Taylor expect income in the year to July 2024 to be just over the 拢1bn mark

鈥淲e will not turn our back on this as we grow because we wish to spread our skillset across a range of different projects and to develop our teams accordingly.鈥�

Group chairman Kevin Taylor said breaking though the 拢1bn barrier would be a landmark 鈥� revenue in 2018 was 拢586m 鈥� but added: 鈥淨uality of construction and sustainable profitability will always be the most important goals for myself and our executive team.鈥�

Taylor said the high-profile collapses of last year, such as Buckingham and MJ Lonsdale, had hit the supply chain the most but added firms like McLaren were also indirectly affected.

鈥淏onding becomes the biggest challenge,鈥� he said. 鈥淭he bonders start to question the industry as a whole [as a result of the failures].鈥�

Turnover in the year to July 2023 was up 22% to 拢964m as the firm returned to the black with a 拢6.4m pre-tax profit from a 拢2.4m loss last time.

The firm is carrying out 75 live schemes at the moment and its jobs include turning a former Top Shop on London鈥檚 Oxford Street into a new 拢50m Ikea retail outlet while it is also carrying out a 拢130m revamp of a 1960s tower in Victoria for Landsec. And it is one of several bidders for the 拢100m Bank Overstation scheme in the City.

Heather said squeezed budgets meant two-stage work was taking around two months longer to get signed off than a couple of years ago but he added: 鈥淲e鈥檙e not seeing a slowdown. There is increased competition for work but there鈥檚 no slowdown. Getting jobs over the line is about the timing of them for clients.鈥�

The firm is seeing workloads tick up in data centres along with leisure jobs and refurbishment work of the kind it is carrying out in London鈥檚 Victoria for Landsec. It also said it has over 拢200m of revenue in the pipeline from health, education, building safety recladding and refurbishment work.