In the year to 30th September 2022, GMI Construction Group generated revenue of £360.3m, up from £120.7m the previous year.
In a year of strong growth, staff headcount nearly doubled, from 121 to 216 and cash at bank grew by £11.4m to £33.7m.
However, it was a year of shortages and rising costs. The cost of sales rose even faster than turnover, leaving a gross profit of just £2.6m (2021: £5.9m).
With a £3m investment in growing the business and opening up a new division in northeast England, the final result was a pre-tax loss of £2.3m for the year.
Lee Powell, who stepped up from being divisional managing director for the company’s Yorkshire regional operation to become chief executive in January 2022, says there isa a 10-year vision to reach £800m turnover.
His plans for GMI include reducing dependency on private sector clients and, in time, regional expansion.
The current portfolio is one third in industrial/logistics (big sheds), one third accommodation (student accommodation, build to rent schemes and hotels), and one third commercial building work (offices and retail). Average contract value last year was £17m. The largest current project is an £80m office building in Manchester city centre.
He is happy with the balance of the portfolio except for the reliance on private sector clients, leaving the business overly exposed to economic turbulence.
“100% of what we do is private sector now,” he told The Construction Index. “But we are now getting on public sector frameworks. I want a third of our business to be in the public sector.”
Earlier this year GMI secured a place on the Pagabo medium works framework.
Powell also has regional expansion in mind. GMI has four offices today, in Leeds, Manchester, Birmingham and Stockton-on-Tees. There are no firm plans yet but the aspiration is to open somewhere in the southwest and somewhere in the Reading/M4 belt.
GMI Construction is also starting to self-deliver. It still subcontracts everything out and has no directly employed site labour but in order to take greater control of costs it has started to buy material itself and appoint its own labour force from agencies. It is a move that has been working well, Lee Powell says.
As for diversification into different industrial sectors, that is not a priority. Whereas Winvic, a similarly fast-growing beds-and-sheds specialist, has got itself onto National Highways’ scheme delivery framework, GMI has no plans to move into highways and civil engineering. Not yet, at least.
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