For the year to 31st December 2021 Buckingham Group Contracting turned over £584m, up 20% on 2019’s £486m. Pre-tax profit was £8.6m (2019: £10.2m).
2021 is looking even better, with £625m turnover expected and 2% net profit.
2020 was the eighth successive year of profitable trading for the company. It maintains zero gearing and has made no use of its credit facilities for five years. The balance sheet shows £44m, up 36% over the past two years.
Part of Buckingham’s success is down to the logistics sector – big sheds and associated works – a buoyant market in which Buckingham has established a strong position. But a quarter of 2020 turnover came from sports facilities and stadia.
Chief executive Mike Kempley said: “It is a matter of great pride for all of our Buckingham colleagues that, as far as our work is concerned, we can genuinely reflect that throughout 2020, and so far during this global pandemic, together we have successfully and safely navigated our way through the potentially huge impacts of Covid-19.
“This success has been a result of the combined ingenuity, professionalism, care, determination, and simple hard work of everyone in the business and the suppliers who support us. Our board also acknowledges the tremendous support we have received from so many long-standing customers.
“Once we had tackled the highly uncertain initial weeks of the first ‘lockdown’ in March 2020, the business was not satisfied with simply surviving during 2020. Instead, we continued to adapt, invest, and develop with the same dynamism that has underwritten the Company’s successful and self-sufficient evolution to date.
“Whilst our head office complex has never been quieter, our work winning teams, based largely from home, have rarely been more active or successful than during the past twelve months. The result of this collective endeavour is that at the time of signing off the results, our teams had already secured a record forward order book of £1.03bn. This includes £590m of secured workload for 2021, with total sales for the year set to exceed £625m.
“2020 marked the culmination of a 20-year period of sustained growth for Buckingham, with the business returning a profit in all but one trading year. The four years to 2020 has seen the company deliver an aggregate net margin of 2.2% on a total £2.0 billion of sales.
In 2020, and despite the impacts of Covid-19, annual turnover reached an all-time high of £584m, with zero gearing, a healthy net margin of 1.5%, and a record year-end cash position of £90m.”
Addressing future prospects, Mike Kempley said: “The company remains active in all our key operating sectors with repeat business for a core of high-quality customers running at 80% as measured by the proportion of all new contracts in 2020. The medium-term target remains to deliver controlled expansion of 5-10% per annum over a five-year period. Trading remains buoyant in each of the company’s operating areas, with record secured workload in place for 2021, some £110m ahead of the same position in 2020.
“Much of this jump represents increased activity in the industrial logistics sector, a primary market for the business, supporting both the core civil engineering and building capabilities, and with rail links increasingly also part of the new infrastructure.
“In addition to high outputs in logistics-based schemes, and in parallel with the substantial public sector work undertaken by the HS2 and rail sectors, our Civil Engineering division has continued to compete successfully for publicly funded work. This includes the recently secured Swindon Distributor Road and M1-A6 Link Road schemes.
“Several years of investment has gone into securing HS2 opportunities and the business has made an impressive early impact by delivering a range of civil engineering enabling works on the scheme. The company’s dedicated sector team have been very effective in understanding and meeting customer priorities, thereby securing further opportunities on the UK’s dominant infrastructure programme. The HS2 project fits extremely well with our direct delivery capabilities and looks set to be a source of healthy sales levels for several years to come.
“Our Sports & Leisure sector had been a rapidly growing source of new business for the past four years with the £148m of activity making up 25% of company workload in 2020. Solid orders for longer term projects such as Fulham FC’s new Riverside Stand and the impressive new Swansea Arena have ensured that sector sales will still represent well over 20% of group turnover in 2021. Looking ahead, Covid-19 has temporarily interrupted the stream of investment by owners and operators, but the company’s high profile in this sector should ensure sales in excess of £100m in 2022.”
He continued: “Buckingham secured a two-year extension to its key Network Rail frameworks until 2023 with secured workload expected to extend into 2024. Although there has been a reduction in Network Rail’s enhancement spending and winning rail sector contracts has naturally become tougher in the more fragmented market, the business continues to secure an impressive share of local authority and train operator rail station, depot and infrastructure projects. Despite the challenges, sales in this specialist sector will be close to £100m in 2021.
“The company’s specialist demolition team continues to steadily diversify its client base, working for a small selection of blue-chip external customers, with no plans to become a general demolition contractor.
“In summary, the board is hugely encouraged by the responsible but determined way in which our teams have tackled the pandemic. Vitally, by remaining customer facing, nurturing our valuable staff resource and carefully managing the inflationary pressures that are impacting the industry, there is every reason to believe that profit margins will return to the target level of 3% or better in the years ahead.”