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Fixed-price work dents GMI Construction profits

The firm, which operates across four divisions in the Midlands and North, said that Covid-related delays to project starts also continued to impact on expected revenue last year.

Turnover at the expanding contractor still rose 5% to £121m, but fell short of the business plan target of £163m due to delayed starts by clients.

Pre-tax profit at the group, which employs around 110 staff, took a knock falling to £1m from £2.9m previously.

Finance director James Smith said: “The construction industry suffered from high inflation during the financial period, with material prices and particularly steel, being subject to unprecedented levels of cost inflation.

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“With all projects being fixed price, the levels of inflation incurred have had an adverse impact on both turnover and profitability for the year to 30 September 2021.

“Despite the decrease in our net margin, when taking into account of the challenges the market faced in terms of inflation and the unavailability of goods and services, linked with an ongoing Covid-19 pandemic, the directors consider the annual results to be positive as the company continued to grow and remain profitable in unprecedented times and continued its trend of being profitable every year since its incorporation.”

The firm’s order book remained healthy with secured turnover for this year standing at more than £300m.

DRS Construction Enquirer MPU July 2020 st3C

 

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