Morrison Construction plans to raise construction margins to an industry-beating 5% next year, after achieving 4.3% returns in the 12 months to 31 March.
Chairman and chief executive Sir Fraser Morrison made the commitment while announcing strong year-end results on Tuesday.
Turnover across the group鈥檚 three divisions 鈥� construction, asset management and development partnerships 鈥� grew 19% to 拢510m. Pre-tax profit rose 11% to 拢26.8m, giving an average group margin of 5.3%. The turnover of the construction division was 拢247m with pre-tax profit of 拢10.7m.
Sir Fraser said: 鈥淲e鈥檙e delighted to keep an average margin above 5% on a turnover of over half a billion. Over time, we hope that the three divisions鈥� contribution to profit will achieve a more balanced position.鈥�
Despite a strong showing from construction, the C-word itself will be dropped from the group鈥檚 name at the annual meeting in July, when it will become Morrison plc. Sir Fraser added: 鈥淐onstruction no longer reflects the full profile of what we do. Our strategy is to provide a comprehensive service from development to asset management, and that will drive where we go as a business.鈥� The development partnerships division, which this week signed a 拢140m joint venture with Thistle Hotels to build 10 hotels in the next five years, produced the best margins with a pre-tax profit of 拢11.8m on a turnover of 拢134m.
Morrison is moving into long-term alliances with clients, including a five-year outsourcing deal with Yorkshire Water.
Sir Fraser is hoping that a third of future business will come from strategic outsourcing contracts. Asset management, which includes facilities management contracts won from local authorities such as Norwich City Council, achieved turnover of 拢129m and pre-tax profit of 拢5.5m.
Sir Fraser predicted further joint ventures and turnover growth at a similar rate as last year, with the slim possibility of an acquisition. 鈥淲e鈥檝e been able to generate an increase in growth without resorting to high-premium acquisitions,鈥� he said.
