Leeds contractor GMI Construction Group edged back into profit last year after a focus on ‘controlled consolidation’ following strong revenue growth at a cost to profitability in 2022.
In the year to September 2023, revenue fell back 9% to £328m but efforts to reduce risk on jobs helped GMI generate a £0.9m profit followinga £2.3m loss in the prior year.
Presently, the group operates in four regions across the North of England and Midlands and has improved average contract value to £21m.
The number of projects completed jumped to 27 from 11 previously although projects on site at year end halved to 15 jobs.
This more cautious approach to new projects saw cash at bank fall from £34m to £10m and the order book shrink nearly 30% to £232m.
Around 80% of work comes from industrial/logistics and multi-room projects.
James Smith, finance director, said: “A critical factor in GMI’s increased profitability, and continuing forecast of future profits, was the decision to apply tough stress tests relating to the financial risk on larger projects.
“Our pricing will always be realistic and we are watching the respected economic forecasts with great care to ensure we can accommodate wider economic factors when triaging new work to establish the value/cost and risk elements.”
GMI continued to focus on negotiated project opportunities, that saw the business secure 6% of its turnover from a single source negotiated workload, with some of the company’s operational divisions benefiting from in excess of 75% negotiated turnover.
Over the year headcount at the firm rose by a quarter to 274 staff.
