Murphy & Sons achieved a 50% rise in pre-tax profit despite a decline in turnover.
- The firm’s annual turnover fell by 4.7% to £1.42bn, yet profits improved.
- Chief financial officer credited ‘commercial discipline’ for the success.
- Significant projects in the UK and Ireland bolstered overall performance.
- Murphy focused on sustainability and new infrastructure projects.
In 2023, J Murphy & Sons demonstrated robust financial performance, marked by a substantial 50% increase in pre-tax profit, despite a 4.7% reduction in turnover to £1.42 billion. This was an impressive turnaround from 2022, where the firm saw profit declines but revenue increases. The firm’s strategic application of commercial discipline was cited as a key factor in this success by Chief Financial Officer Joe Ledwidge, who highlighted its impact on risk management and contract selection.
The decrease in turnover was primarily due to the timing and completion of international projects, notably in Canada. However, this was effectively counteracted by heightened activity in the UK and Ireland, ensuring that 2023’s turnover was still £150 million higher than 2021. The UK’s contribution was particularly significant, comprising £1.01 billion of the total turnover, dominated by civil engineering projects.
Enhanced profitability enabled Murphy to disburse £16.9 million in dividends, a notable increase from £9.1 million in the previous year. Further cementing its financial health, the company declared an interim dividend of £8.8 million after the reporting period. This period also saw an improvement in Murphy’s net cash position from £275.5 million to £347.1 million, facilitated by a focus on working capital management.
Murphy’s workforce grew with an average headcount rising from 3,688 in 2022 to 3,855 in 2023, reflecting the increased operational demands. The group’s commitment to personnel development was evident with a 35% increase in training and development expenditure, reaching £3.1 million.
The company’s order book surged by 31% to £3.31 billion, driven by significant contracts such as the £1.34 billion Lower Thames Crossing project, executed in partnership with Bouygues. Engineering director Richard Sutherden remarked on the successful completion of major projects, including the London Power Tunnels Phase 2.
Murphy also maintained its focus on environmental sustainability, reporting Scope 3 greenhouse gas emissions for the first time and investing close to £40 million in green technology. By 2026, the firm intends to invest £75 million in eco-friendly initiatives and is committed to sourcing all electricity from renewable sources by 2025. This dedication was underscored by a newly secured £25 million credit facility aimed at expanding its green infrastructure.
Chief Executive John Murphy expressed optimism about future growth, particularly within traditional civil markets as well as emerging sectors such as energy security. Similarly, UK Managing Director Nick Fletcher highlighted a positive outlook for UK construction, aligning with governmental infrastructure plans that foresee £700 billion investment over the next decade.
Murphy’s strategic focus on commercial discipline and sustainability positions the firm for continued growth and success in the evolving construction industry.
