McGee has published its financial results for the year ended 30 November 2022 – and after it was investigated by the Competition and Markets Authority.
The specialist engineering contractor saw revenue and profit fall slightly in the financial period but had delivered a “solid set of financial results”.
The impact of material price volatility during the financial year was identified early and minimised by having “mature discussions with clients” about how best to manage risk, it said.
“This has helped build the trust and confidence of clients and stakeholders and delivered certainty in financial performance,” it added.
- Revenue: £83.3 million (FY2021: £92.2 million)
- Profit after tax: £5.2 million (FY2021: £5.6 million)
- EBITDA as a percentage of turnover: 11.5% (FY2021: 10.1%)
- Cash: £10.3 million (FY2021: £10.2 million)
The business had zero borrowing and was debt free, funding its working capital requirements from operating activities.
An employee ownership bonus of £558,123 was paid after year-end.
It also reported a strong order book and pipeline of work.
Turnover in FY2023 is forecast to be more than £120 million, with a corresponding material increase in profit after tax.
CMA bid rigging investigation
In March this year, the Competition and Markets Authority (CMA) fined McGee £3,766,278 for colluding on prices through illegal cartel agreements when submitting bids in tenders for contracts between January 2013 and June 2018, as part of an investigation which saw 10 construction firms fined a total of nearly £60 million.
“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,” wrote McGee in its report. “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.”
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.”
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