NG Bailey, the Yorkshire-based engineering, IT and facilities services group, said it had delivered a strong set of full-year results in a tough construction market.
The Ilkley-based company, which employs around 2,500 people, achieved a 43 per cent rise in underlying operating profit to £3m in the year ended February 27.
David Hurcomb, NG Bailey’s chief executive, said the market had improved faster than he had anticipated following the Conservative Party’s triumph in the General Election, and NG Bailey has also been buoyed by a major contract win in the nuclear sector.
The growth in operating profit was achieved despite an investment of £2.7m in new services. Mr Hurcomb aims to create a more diversified business that is less reliant on traditional building construction work.
He is placing a greater emphasis on services – such as IT, energy and facilities management – and on engineering construction, particularly large infrastructure projects. The company has achieved a 20 per cent growth in sales within its services businesses while sales in building construction declined by 16 per cent.
Overall sales fell by four per cent to £365m. During the period, NG Bailey’s secured order book rose from £550m to £590m, with the company named as preferred bidder on a further £140m of work – taking its forward order book at year end to a record £730m.
Last week, NG Bailey was named preferred bidder on a number of further contracts including the £460m electrical package at EDF Energy’s proposed Hinkley Point C new nuclear power plant in Somerset – in partnership with Balfour Beatty. This takes the company’s potential forward order book to more than £1bn.
Mr Hurcomb said: “This is a strong result. We are all aware the economic environment is improving, but we also know that it is taking time to filter through to our industry.
“It’s still tough out there, particularly in building construction. Margins remain under pressure across the supply chain, which is why we seek to avoid bidding for high-risk, low margin work. That said, all of our divisions performed profitably, which gives us a strong platform for developing a long-term, sustainable, business.
“We firmly believe our strategy of creating a much more broadly-balanced business is the right one. We remain committed to growing each and every part of our business, which includes the work we do in the traditional building construction market.”
Mr Hurcomb said the turnover from the modular building division based in Bradford is £8m, and he hoped to double turnover from that part of the business to £16m over the next three years.