Employee-owned Ground Construction Ltd (GCL) has posted an increase in pre-tax profit while sounding a warning note about macroeconomic factors still bearing down on the sector.
The groundworks, demolition and concrete frame provider said it had taken a “cautious approach” to tendering amid challenges facing the construction industry.
Newly released accounts for the year ending 30 June 2024 showed pre-tax profit almost trebled from £1.1m to £3.2m .
This was achieved despite a 9 per cent drop in turnover from £103.7m to £95.4m.
GCL’s profit margin therefore broadened from 1.1 per cent to 3.4 per cent.
Cash at bank and in hand grew from £8.4m to £11m, and the firm paid £3.9m in dividends compared with £514,000 the year before.
It held no long-term bank loans, while short-term repayable loans fell from £1.8m in 2023 to £1m the year after.
GCL, which was sold to an employee ownership trust in September 2021, operates across London, the South and the Midlands.
It employed a monthly average of 66 staff in its latest accounts, up slightly from 63 the previous year.
In a strategic report published with the results, director John Diviney said the broader economy and the construction industry continued to face challenges from the ongoing fallout of macroeconomic factors throughout the financial year.
“The impact of regulatory changes, high interest rates, inflationary pressures and high-profile business collapses within the construction industry can be seen with increased scrutiny from lenders, credit insurers and bond providers,” he said.
Diviney added that GCL’s directors were “pleased with the way the business had traded throughout the period” and responded to these economic challenges.
“Given the uncertainties existing in the wider economy, the directors are undertaking regular reviews of the pipeline and business forecasts to ensure that timely responses can be made to any identified risks,” Diviney said.
“The company has taken a cautious approach to the tender process, ensuring that risks are clearly identified and assessing profitability on schemes before submission of final tenders.”
