A close study of the UK’s 100 biggest construction firms is always instructive. What happens to these companies, representing the top tier of the construction supply-chain, has ramifications for myriad smaller businesses.
This year’s TCI Top 100 provides a snapshot of the financial performance of the UK’s leading contractors up to the point when Covid-19 struck.
And, as we observe in our feature starting on page 27 of this issue, the turnover figures look pretty good, with 70 of the 100 companies listed registering an increase in revenues in their latest figures – compared to 66 last year.
But a closer look reveals a pattern that we have observed consistently in our monthly focus on the top 20 contractors in various industry sectors: that while workloads remain robust, profitability is weakening.
The old adage remains true – that turnover is vanity while profit is sanity – and any sustained decrease in margins should serve as a warning. Remember, this was before Covid-19.
Next year’s Top 100 will illustrate the damage caused by the pandemic and is likely to make grim reading. But our main news story this month offers one glimmer of hope: a study by Loughborough University has found that while output on UK construction sites was impacted by the new Site Operating Procedures brought in following the lockdown, worker productivity actually improved.
It’s a tough lesson to learn, but at least there’s a chance that something good might have come from all this. !