GMI Construction Group PLC

GMI Construction Group PLC has returned to profit after a loss of £2.3m in the previous financial year. In the year ending September 30th 2023, it delivered a net profit of £916,000.

The results demonstrate the effective action the business has taken in terms of cost control, productivity gains and the effective triaging of new work.

KEY PERFORMANCE INDICATORS:

Year ending September 30^th

              2023                                    2022

Turnover £328.5m                           £360.3m

Net profit £0.9m                              -£2.3m

Gross profit (£) £8.6m                      £2.6m

Gross profit (%) £2.61%                   0.72%

Secured forward orders £232m       £325m

Cash at Bank £10.2m                       £33m

Average contract value £21m           £17m

Average headcount 274                     216

The performance is the result of the firm’s deliberate and focussed action, delivering a slightly smaller turnover and significantly improved profits. In the current year (23-24) it has already secured a pipeline of £232m of new work, which is expected to contribute to further increases in profitability as the company returns to pre-pandemic margins. The future pipeline of work is robust and includes all sectors; hotel developments, student accommodation, build-to-rent apartments, industrial and logistics facilities and commercial offices.

Lee Powell, CEO of GMI Construction, said: “Our strategic investment programme, which began three years ago, has played an important part in helping GMI come through a period of market turbulence that started with the pandemic and ended with massive inflationary pressures and then subdued orders due to the high interest rate environment.

“The firm’s investment in IT has played a critical role in the improvement to productivity and is making a real impact into the cost control of major projects, by providing real time information on materials and manpower to project leaders.”

In 2022-23, the business also took a strategic decision to apply for a number of public sector frameworks; so far it has been accepted onto five important frameworks, which have already provided a route to successful tenders for public sector contracts.

A critical factor in the firm’s return to profitability and its forecast of future profits, is the decision to apply tough stress tests relating to the financial risk on larger projects.

Lee Powell added: “Our pricing will always be realistic, and we are watching the respected economic forecasts with great care to ensure we can accommodate wider economic factors when triaging new work to establish the value/cost and risk elements.

“Looking to the future, we are approaching the next financial year with confidence. Inflation has already fallen significantly and has been predicted to drop to 2%. We are cautiously optimistic that modest, but helpful, reductions in interest rates will follow, unlocking our clients’ funding pipeline for a range of projects that are ready to go.

“We have decided to focus on deliverable projects with clients that have realistic cost expectations and expect turnover next year to remain subdued while we focus on a sustainable recovery in profitability.”

“The results are also symptomatic of the slow recovery of the economy and the fact that, unlike other peer group firms, we are not as exposed to liabilities arising from the introduction of the Building Safety Act.”

ENDS

News release issued on behalf of GMI Construction Group PLC.

For further information contact Jamie Collis or Andrew Douglas on 01325 363436

Notes to editor

About GMI Construction Group

GMI Construction Group PLC is an established and successful UK contractor and construction services company providing specialist design and build capabilities spanning multiple sectors.

Founded in 1986, the independent company has a proven track record for the delivery of high quality, energy efficient, often complicated projects from inception to completion with a strong focus on innovation and technology.

It operates across multiple sectors and markets including commercial offices, mixed-use buildings, residential, retail, education, distribution and logistics, manufacturing, hotels, and leisure.

Driven by strong core values, its focus is on exceeding customers to leave a positive legacy in the communities we serve, protecting the environment for the future generation and promoting a safe and inclusive workplace for our colleagues.

https://gmi.co.uk/