For the year to 27th February 2015, NG Bailey’s sales fell 4% to £365m while pre-tax profit on ordinary activities for the year was £4.2m, down 39% from £6.9m the previous year. The fall in profits was attributed to lower realised investment returns.
There was a 43% jump in underlying operating profit, however, to £3m thanks to a new emphasis on services rather than construction. The company’s strategy is to move beyond traditional building construction work and into IT services, energy and facilities management, as well as engineering construction, particularly large infrastructure projects. The growth in operating profit was achieved despite an investment of £2.7m in these new services.
Although revenue from building construction declined by 16% last year, there was growth in the new target markets.The services businesses saw a 20% growth in sales, including a 28% increase within Facilities Services and a 7% increase in IT Services.
During the year, the secured order book increased from £550m to £590m, with the company named as preferred bidder on a further £140m of work – taking its forward order book at year end to a record £730m.
Since the start of the new financial year in March, NG Bailey has been named preferred bidder on a number of further contracts including the £460m electrical package at EDF Energy’s proposed Hinkley Point C new nuclear power plant in Somerset – in partnership with Balfour Beatty. This takes the company’s potential forward order book to more than £1bn.
The company remains debt-free and has more than £83m in net assets.
Chief executive David Hurcomb said: “This is a strong result. We are all aware the economic environment is improving, but we also know that it is taking time to filter through to our industry.
“It’s still tough out there, particularly in building construction. Margins remain under pressure across the supply chain, which is why we seek to avoid bidding high-risk, low margin work.
“That said, all of our divisions performed profitably, which gives us a strong platform for developing a long-term, sustainable, business.
“We firmly believe our strategy of creating a much more broadly-balanced business is the right one. We remain committed to growing each and every part of our business, which includes the work we do in the traditional building construction market. This is what our business was built on when the company was founded in 1921 and, it will remain a core part of our business."