Wednesday August 30, 2023
McGee delivers strong performance and forecasts future growth
McGee, a Specialist Engineering Contractor delivering high-profile, complex engineering projects, announces its financial results for the year ended 30 November 2022.
Highlights:
- A clear strategic focus on delivering its value proposition drives a strong financial performance in a challenging economic environment.
- Revenue £83.3 million (2021: £92.2m)
- Profit after tax £5.2 million (2021: £5.6m)
- EBITDA as a percentage of turnover at 11.5% (2021: 10.1%)
- Strong cash position of £10.3 million (2021: £10.2m)
- No borrowing
- The business remains debt-free, funding its working capital requirements from operating activities.
- A disciplined strategic focus remains a key point of difference for McGee’s board, supported by their engaged employee-owners.
- An Employee Ownership bonus of £558,123 was paid after year-end.
- A strong order book and pipeline of work with controlled and strategically aligned growth expected in FY23 and FY24. Turnover in FY2023 is forecast to be in excess of £120m, with a corresponding material increase in profit after tax anticipated.
Despite a challenging macro-economic environment, McGee delivered a strong performance in FY2022, highlighting its ability to anticipate, adapt, and mitigate risks. Material price volatility was identified early, and the impact on the business was minimised by having mature discussions with clients about how manage the risk best. This has helped build the trust and confidence of clients and stakeholders and delivered certainty in financial performance.
The Company focuses on delivering fully integrated engineering solutions to clients. Its strategy is built on self-delivery, focused on developing the highest quality technical solutions and prioritising the pursuit of strategically aligned opportunities over business scale – a focus on being value-led, efficient and delivering certainty.
Seb Fossey, Group Managing Director, said, “Our team of engaged employee-owners have once again delivered a solid set of financial results, and the outlook for the business is very positive as we continue to focus on securing technically challenging opportunities.
Our ability to mitigate risks and build authentic, collaborative relationships has been the cornerstone of our success in recent years. We have continued to see good progress over the reporting period, with external stakeholders now increasingly clear on the benefits of our strategy and operating model.
We still firmly believe our value proposition is unique – it’s more than just saying we can integrate our activities – it is the culture, behaviours, and organisational design that we have developed and bedded in over time that truly create benefits for our clients.
Having secured some of the largest and most prestigious specialist engineering packages in London, we are inevitably now anticipating that our revenue will exceed pre-COVID levels in FY23 and beyond into FY24 whilst retaining our operational effectiveness.”
During the financial year, McGee commenced several major schemes for its clients, including the demolition and enabling works on a new office development at 7 Millbank and on several other substantial developments.
Outlook
The CMA’s investigation into historical competition issues in the demolition industry, which arose under the Company’s previous ownership and leadership, has now concluded. McGee fully cooperated with the investigation and was granted leniency by the CMA, which led to the agreement of a reduced penalty for the historical wrongdoing. The fine was fully provided for in previous accounting periods and has been paid in full, meaning that this matter is now closed.
Looking ahead, McGee is perfectly positioned to continue delivering high-profile and complex projects in central London with its strong order book and pipeline of opportunities. Its forecast growth is well aligned with its operational capacity and strategic capabilities, focussed on delivering value and certainty to clients.