Gross profit margins across the construction industry are tight, especially in 2025. A question I have had for a while is: How do today’s margins compare with those of 10 years ago?
To get a better idea, I tracked the financial results of five top UK main contractors*: Balfour Beatty, Kier Group, Laing O’Rourke, Mace Group, and Morgan Sindall Group.
Why gross profit margin matters
Construction contractors often prioritise revenue over margins in their company announcements. And while gross profit isn’t everything, understanding it can be important for long-term solvency and success. Here’s how:
- Risk – A fluctuating gross profit margin is usually an indicator a key construction project has lost money, understanding that means avoiding it in the future.
- Stability – Maintaining a stable gross profit margin can be the difference between survival and collapse.
- 10-year view – Instead of reacting to a single 12-month trading period, taking a longer view of margin performance offers a deeper insight into what worked and what did not.
- Decision making – Whether you are bidding, lending, or partnering, margin trends can inform critical long-term, cross-company investment decisions.
Now, let’s take a look at the findings:
| Company | Year | Turnover | Cost of Goods | Gross Profit | Gross Margin |
| Balfour Beatty | 2015 | £6,955,000,000.00 | £6,798,000,000.00 | £157,000,000.00 | 2.26 |
| Balfour Beatty | 2016 | £6,923,000,000.00 | £6,639,000,000.00 | £284,000,000.00 | 4.10 |
| Balfour Beatty | 2017 | £6,916,000,000.00 | £6,605,000,000.00 | £311,000,000.00 | 4.50 |
| Balfour Beatty | 2018 | £6,634,000,000.00 | £6,263,000,000.00 | £371,000,000.00 | 5.59 |
| Balfour Beatty | 2019 | £7,313,000,000.00 | £6,931,000,000.00 | £382,000,000.00 | 5.22 |
| Balfour Beatty | 2020 | £7,320,000,000.00 | £7,081,000,000.00 | £239,000,000.00 | 3.27 |
| Balfour Beatty | 2021 | £7,185,000,000.00 | £6,904,000,000.00 | £281,000,000.00 | 3.91 |
| Balfour Beatty | 2022 | £7,629,000,000.00 | £7,202,000,000.00 | £427,000,000.00 | 5.60 |
| Balfour Beatty | 2023 | £7,993,000,000.00 | £7,581,000,000.00 | £412,000,000.00 | 5.15 |
| Balfour Beatty | 2024 | £8,234,000,000.00 | £7,817,000,000.00 | £417,000,000.00 | 5.06 |
| Kier | 2015 | £3,275,900,000.00 | £2,993,000,000.00 | £282,900,000.00 | 8.64 |
| Kier | 2016 | £4,112,300,000.00 | £3,702,000,000.00 | £410,300,000.00 | 9.98 |
| Kier | 2017 | £4,128,800,000.00 | £3,840,100,000.00 | £288,700,000.00 | 6.99 |
| Kier | 2018 | £4,493,300,000.00 | £3,837,700,000.00 | £655,600,000.00 | 14.59 |
| Kier | 2019 | £4,494,400,000.00 | £3,864,700,000.00 | £629,700,000.00 | 14.01 |
| Kier | 2020 | £3,422,500,000.00 | £3,220,400,000.00 | £202,100,000.00 | 5.91 |
| Kier | 2021 | £3,261,000,000.00 | £2,976,900,000.00 | £284,100,000.00 | 8.71 |
| Kier | 2022 | £3,143,900,000.00 | £2,879,900,000.00 | £264,000,000.00 | 8.40 |
| Kier | 2023 | £3,380,700,000.00 | £3,074,400,000.00 | £306,300,000.00 | 9.06 |
| Kier | 2024 | £3,905,100,000.00 | £3,570,100,000.00 | £335,000,000.00 | 8.58 |
| Laing O’Rourke | 2016 | £1,478,900,000.00 | £1,491,800,000.00 | -£12,900,000.00 | -0.87 |
| Laing O’Rourke | 2017 | £1,826,200,000.00 | £1,704,400,000.00 | £121,800,000.00 | 6.67 |
| Laing O’Rourke | 2018 | £1,841,600,000.00 | £1,739,900,000.00 | £101,700,000.00 | 5.52 |
| Laing O’Rourke | 2019 | £1,932,300,000.00 | £1,770,600,000.00 | £161,700,000.00 | 8.37 |
| Laing O’Rourke | 2020 | £1,651,900,000.00 | £1,488,800,000.00 | £163,100,000.00 | 9.87 |
| Laing O’Rourke | 2021 | £1,515,400,000.00 | £1,395,700,000.00 | £119,700,000.00 | 7.90 |
| Laing O’Rourke | 2022 | £1,807,300,000.00 | £1,651,000,000.00 | £156,300,000.00 | 8.65 |
| Laing O’Rourke | 2023 | £2,034,900,000.00 | £2,092,600,000.00 | -£57,700,000.00 | -2.84 |
| Laing O’Rourke | 2024 | £2,394,500,000.00 | £2,288,500,000.00 | £106,000,000.00 | 4.43 |
| Mace | 2015 | £1,766,684,000.00 | £1,633,555,000.00 | £133,129,000.00 | 7.54 |
| Mace | 2016 | £1,965,848,000.00 | £1,847,843,000.00 | £118,005,000.00 | 6.00 |
| Mace | 2017 | £1,971,748,000.00 | £1,836,066,000.00 | £135,682,000.00 | 6.88 |
| Mace | 2018 | £2,349,770,000.00 | £2,194,043,000.00 | £155,727,000.00 | 6.63 |
| Mace | 2019 | £1,782,279,000.00 | £1,620,314,000.00 | £161,965,000.00 | 9.09 |
| Mace | 2020 | £1,730,512,000.00 | £1,580,833,000.00 | £149,679,000.00 | 8.65 |
| Mace | 2021 | £1,933,017,000.00 | £1,733,335,000.00 | £199,682,000.00 | 10.33 |
| Mace | 2022 | £1,936,488,000.00 | £1,718,569,000.00 | £217,919,000.00 | 11.25 |
| Mace | 2023 | £2,356,792,000.00 | £2,100,459,000.00 | £256,333,000.00 | 10.88 |
| Mace | 2024 | £2,788,683,000.00 | £2,562,119,000.00 | £226,564,000.00 | 8.12 |
| Morgan Sindall | 2015 | £2,385,000,000.00 | £2,218,000,000.00 | £167,000,000.00 | 7.00 |
| Morgan Sindall | 2016 | £2,562,000,000.00 | £2,318,000,000.00 | £244,000,000.00 | 9.52 |
| Morgan Sindall | 2017 | £2,793,000,000.00 | £2,518,000,000.00 | £275,000,000.00 | 9.85 |
| Morgan Sindall | 2018 | £2,971,500,000.00 | £2,656,200,000.00 | £315,300,000.00 | 10.61 |
| Morgan Sindall | 2019 | £3,071,300,000.00 | £2,739,900,000.00 | £331,400,000.00 | 10.79 |
| Morgan Sindall | 2020 | £3,034,000,000.00 | £2,718,200,000.00 | £315,800,000.00 | 10.41 |
| Morgan Sindall | 2021 | £3,212,800,000.00 | £2,830,000,000.00 | £382,800,000.00 | 11.91 |
| Morgan Sindall | 2022 | £3,612,200,000.00 | £3,241,300,000.00 | £370,900,000.00 | 10.27 |
| Morgan Sindall | 2023 | £4,117,700,000.00 | £3,672,900,000.00 | £444,800,000.00 | 10.80 |
| Morgan Sindall | 2024 | £4,546,200,000.00 | £4,016,300,000.00 | £529,900,000.00 | 11.66 |
What does the data say?**
Gross profit margins have not changed as much as you might think in recent history.
Across 10 years, Balfour Beatty, Kier, Laing O’Rourke, Mace, and Morgan Sindall operated on margins that have rarely exceeded 8 per cent, with the latter being the exception and even outlier in the group.
Construction remains a low-margin, high-risk game and the industry by and large has not shifted into higher margin territory, unlike sectors such as tech or professional services.
Of the five contractors monitored across a 10-year trading period, Morgan Sindall maintained a consistent margin in the mid-single digits. That stability is a sign of strong cost control and risk management.
The margins of Balfour Beatty and Kier during that period fluctuated, reflecting the pressure of bidding for large-scale infrastructure projects where small overruns can erode profits.
Laing O’Rourke, meanwhile, at times experienced negative margins, primarily due to a mix of inflationary pressures from fixed-price contracts and some over-exposure from overseas projects.
Mace has been relatively consistent in its gross profit margin over the same period, largely due to its diversified services offering, in particular its consulting division whose performance has provided some predictability.
Despite Brexit, the pandemic, changes in inflation and pricing pressures surrounding materials and the labour force, as well as other significant factors impacting the UK economy and construction industry, the broader picture appears to be one of resilience rather than transformational growth, underpinned by strong cost control and risk management.
Key takeaways
- Strong cost control and risk management
- Clear and strategic leadership/management teams
- Cutting loss-making ventures and prioritising high-margin ones
- Careful cash flow management and adequate reserves
- A well-diversified portfolio/range of services/sectors
- Unhindered invoicing and payment solutions
- Customer and client satisfaction, growth and retention
- Competitive pricing/bidding, not self-sabotage
‘Margin protection is management discipline, not a finance exercise’
“The data confirms what most project leaders already know: construction has always been a high-effort, low-margin business. The real story isn’t how little margins have moved, but how much resilience it has taken to hold the line,” said Kara Thompson, executive director, head of FACTION UK.
“A decade of political, economic and market volatility has forced contractors to become better risk managers, not necessarily better profiteers. Margins of five to eight per cent reflect not inefficiency, but the structural realities of an industry that absorbs enormous delivery risk long before profit is realised.
“From a project management perspective, this reinforces a simple truth: success isn’t about just winning work, it’s about how you deliver it. The firms that have survived and grown, such as Morgan Sindall and Mace, treat margin protection as a management discipline, not a finance exercise. They embed commercial awareness in every decision, from design through to delivery.
“For clients, this should serve as a reminder rather than a wake-up call. Predictable, high-quality outcomes rely on sustainable margins. Profit enables performance, and the race to the bottom benefits no one in the long run.”
____
*Ranking determined by revenue (income)
**One company had ‘exceptional expenses’ in their annual accounts, which I have omitted.
Source: Endole
Was this interesting? Try: Bellway revenue and profits keep climbing amid ongoing legacy remediation works
If you have a tip or story idea that fits with our publication, please contact the news reporter/editor
Get industry news in 5 minutes!
A daily email that makes industry news enjoyable. It’s completely free.
