Reasons to Invest

Investors Summary

The Leading UK Player

  • The UK’s largest ground engineering contractor with the broadest range of specialist services, and a presence across all UK regions
  • Differentiated end-to-end capability from initial ground investigation and survey, through to design and UK’s widest range of specialist construction capabilities
  • A well invested rig fleet – the largest in the UK with over 140 rigs
  • Transformation strategy completed, experienced Board and senior management team in place
  • Diverse and leading position across housing, infrastructure and construction markets enable early benefit from upside investment cycles, whilst mitigating against sub-sector headwinds
  • Successful track record of recent M&A and plan for further consolidation and diversification
  • Leading position in high-growth water and energy sub-sectors
  • Leading position in rail
  • One of only two national providers of modular foundation systems (Smartfoot) to the housing sector
  • Increasing proportion repeat business (approximately 30% of revenues) through customer frameworks, in all sectors
  • Low-risk commercial model as a specialist subcontractor – minimal exposure to typical construction sector risks

Strong Financial Position

  • Strong balance sheet, available funding facility and low levels of debt
  • In excess of £50m replacement cost of plant and machinery
  • Liquidity headroom to support further growth, M&A and capital investment
  • Stable institutional shareholder base
  • A progressive and well covered dividend, approximately 3% yield
  • Up to £11m funding facility

Clear Strategy for Growth

Medium term growth plans include:

  • >10% compounded year-on-year revenue growth from FY2025 driven by:
    • Housing market and tall residential market recovery
    • Essential infrastructure investment drives rapid growth in water and energy sectors
    • Increased CP7 volumes and major projects (eg TRU) in rail
    • Expected growth in logistics, data centres and industrial facilities
    • New integrated civils capability
    • Further bolt-on acquisitions
    • New customer partnerships and frameworks

 

  • EBIT margin improvement from 4% to 6–7% by FY28:
    • Pricing advantage from scale and differentiated breadth of expertise
    • Evolving work mix towards greater proportion of infrastructure revenues
    • Leveraging fixed overhead and corporate costs against increased revenues, driving higher rig utilisation
    • Continued commercial governance, bid selectivity and risk management to avoid low margin projects and commercial disputes

 

  • ROCE improvement to 15–20% by FY28:
    • All new operational capex meets 25% ROCE threshold
    • Continual refreshing of the rig fleet to maximise utilisation and reliability
    • Disposal of non-profit generating assets