Despite significant revenue growth, McAleer & Rushe’s profit margins have suffered due to inflation.
- The design-and-build contractor recorded a decrease in pre-tax profit from £12.1m to £11m.
- Revenue increased from £404.4m to £436.4m, boosted by large projects in Birmingham and Norwich.
- The company aims to reach a £500m turnover by 2025, with a strong start in 2024.
- Managing Director Martin Magee cited inflation pressures but highlighted a stable supply chain.
McAleer & Rushe, the Northern Ireland-based contractor, reported a fall in pre-tax profit to £11m for the year ending 31 December 2023, compared to £12.1m the previous year. This decline was attributed to the effects of price inflation during the later phases of projects, despite a notable increase in revenue, which rose from £404.4m to £436.4m.
The company’s revenue growth was primarily driven by the completion of significant contracts in 2023, including the construction of a 15-storey Premier Inn hotel in Birmingham for £52m and a student accommodation project in Norwich valued at £42m. These projects helped bolster the company’s financial performance, although increasing costs impacted profitability.
Martin Magee, McAleer & Rushe’s managing director, acknowledged the impact of inflationary pressures on the company’s profit margins but emphasised that there was “no change in our supply chain payment pattern.” This assertion was supported by an improved cash position, which rose to £53.1m from £45.2m at the end of the previous year.
Looking forward, McAleer & Rushe has set ambitious turnover targets, projecting an increase to £450m in 2024, with an aim to surpass £500m by 2025. This growth forecast is underpinned by a promising start to 2024, with over £350m in contracts initiated, predominantly in large-scale residential projects.
Among the major projects driving this anticipated growth are a £76m integrated retirement community in Kent and a £100m mixed-use development in central London. These projects are expected to contribute significantly to the company’s objective of reaching and potentially exceeding the £500m turnover mark.
Additionally, the company declared a £6m dividend and increased director payments from £1.3m to £2.1m, reflecting its commitment to rewarding stakeholders while pursuing its growth objectives.
McAleer & Rushe is navigating challenges to ensure long-term growth, aiming for a substantial turnover increase despite inflationary pressures.
