HG Construction posting a turnover of £424m in 2023. This represents an increase of 26% from 2022, when the company achieved a turnover of £336m – and 75% growth on 2021’s £242m turnover.
However, that growth in turnover has been accompanied by a reduction in profits. Gross profit was £14.7m in 2023, compared to £22.0m in 2022 and £29.9m in 2021.
The gross margin last year was just 3.8% , compared to 6.5% the previous year and 12.3% the year before that.
Proft before tax has fallen similarly over the past three years, from £24.9m in 2021, to £15.3m in 2022 to £6.4m last year.
Fixed price contracts and high inflation were the key factors behind HG Construction’s diminished performance in 2023, a years that the company described as “very challenging”. The directors expect 2024 results to show a return to stronger margins following the completion of legacy fixed price contracts.
Over the past five years Hitchin-based HG Construction – originally Hunting Gate Construction – has branched out into new sectors and regions, including Leeds, Manchester and Bristol. It has also invested in a manufacturing facility in Hull that produces bathroom pods and utility cupboards, acquiring the assets of Kubex.
Chief executive Adam Quinn said: “We are pleased to have achieved our growth targets over what was an extremely challenging year with record price inflation. This impacted our profitability across fixed price contracts in particular, however we continued to invest in our internal delivery capabilities and this offered us some level of protection against escalating costs.
“HG Construction has undergone a period of significant growth in recent years, and we have invested in plant, procedures and staff in line with our expansion. Going forward our focus will be on revenue stabilisation and internal strengthening, ensuring that our structure, procedures and processes enable us to maintain the high standards we are committed to.
“We are proud of our teams for their hard work and dedication, keeping safety, quality and delivery at the forefront of our offering and ensuring a consistently high level of service for our valued client base. 2024 is proving to be a year of more certainty and stability and we are pleased to have secured a strong pipeline of work in our core sectors. Our focus will remain on supporting our teams to deliver exceptional standards and maximising our social value contributions across our sites. We are excited to be working on outstanding schemes across the UK and feel very positive about the next phase in our company’s evolution.”
HG’s clients include Dominus, Elysian Residences, Greystar, Manner, Meadow Residential, McLaren Property/Living, Scape, Studio Hive, Southern Housing Group and Tribe Student Housing. Recent contract wins include a 1,014-bed PBSA scheme in Manchester, a 375-bed build-to-rent scheme in Leeds and a 706-bed PBSA scheme in Bristol.
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