WET News

30 Leaders 2015 McNicholas' specialist planning McNicholas lismirrane industrial Park Elstree Road Elstree herts WD6 3Ea 020 8953 4144 www.mcnicholas.co.uk MoRgaN siNDall corporation street Rugby cV21 2DW T: 01788 534500 www.morgansindall.co.uk the LeADeRS 2015 McNicholas is a service provider with wide experi- ence in the utilities, commu- nications, renewables and rail markets. Its utilities activities includes delivering work in the water and wastewater sector through framework agreements. The company specialises in design and construction services and managing the supply, install, testing and commissioning of civil, mechanical, electrical, instrumentation, control and automation solutions. Last year, McNicholas bagged a five-year utilities contract with Fulcrum, a leading independent utilities infrastructure business. McNicholas became Ful- crum's sole framework contractor for future gas, electricity and multi-utility connection works at develop- ments across England and Wales. The move to a single framework delivery partner enabled Fulcrum to increase its competitive position by taking advantage of the booming new-build housing Morgan Sindall says its Construction & Infrastructure division has been impacted by delivery pressures relating to a small number of construction contracts, which are all due to complete within the first half of 2015. The division reported a 5% drop in revenue to £1.17bn last year, compared with 2013, while adjusted operating profit was down £72% to £3.5M. The problem contracts resulted in Morgan Sindall issuing a profits warning last October. The group says that while the Infrastructure business performed "reasonably well" across the year, delivery pressures in London and the South's Construction activities during the second half resulted in an escalation of costs and increased forecast costs to complete. This adversely impacted profitability and margin. On the water side, which market while simplifying business processes and further improving the efficiency of back office functions including pricing, estimating and design services. However, the deal was terminated this year as Fulcrum took its installation team in-house in a bid to accelerate plans such as improving its multi-utility capability. On the water and waste- water side of its business, McNicholas says its qualified industry specialists can plan the most cost-effective contributed 11% to the Construction & Infrastructure division's revenue, Morgan Sindall continues to work within three frameworks, all of which have been extended into AMP6. Within other parts of Infrastructure, the division has continued to target growth sectors with high barriers to entry. The group says it is currently working on some of the UK's "most complex civil infrastructure programme, whether it is in a highly congested inner London site, or regional and local projects across the UK, delivering design and construction services and managing the supply, install, testing and commissioning of civil, mechanical, electrical, instrumentation, control and automation solutions. It advises on feasibility, programming and contact with statutory bodies and other third parties, and can help with surveys and mapping of existing utilities and in designing diversions including tunnelling. projects" including in joint venture on Thames Water's £635M Lee Tunnel and on the C510 Whitechapel and Liverpool Street Station tunnels contract for Crossrail. Current Yorkshire Water projects include the £14.6M project to upgrade Castleford Wastewater Treatment Works; the £22M project to improve Bridlington's bathing water quality; and a similar scheme at Scarborough, worth around £26M. ThE NUMBERs 11/12 12/13 13/14 % chaNgE Sales £M 154.6 176.7 143.1 -19 Gross profit £M 14.2 20.1 20 -0 Operating profit £M 0.8 5.1 4.3 -17 Pre-tax profit £M 0.3 4.7 4 -14 Staff 1,502 1,585 1,382 -13 Net assets £M 6.8 8.9 9.8 11 ThE RaTios 11/12 12/13 13/14 % chaNgE Return on capital % 3.8 52.8 41 -22 Gross margin % 9.2 11.4 14 23 Operating margin % 0.5 2.9 3 3 Net margin % 0.2 2.6 2.8 6 Sales/employee £K 102.9 111.5 103.6 -7 Morgan Sindall profits hit by construction deals ThE NUMBERs 2011 2012 2013 % chaNgE Sales £M 2,226.6 2,047.1 2,094.9 2 Gross profit £M 215.7 186.7 156.6 -16 Operating profit £M 40.8 35.2 16.2 -54 Pre-tax profit £M 40 34.2 13.9 -59 Staff 6,744 6,384 n/a n/a Net assets £M 235.9 249.7 257.5 3 ThE RaTios 2011 2012 2013 % chaNgE Return on capital % 17 13.7 5.4 -61 Gross margin % 9.7 9.1 7.5 -18 Operating margin % 1.8 1.7 0.8 -55 Net margin % 1.8 1.7 0.7 -60 Sales/employee £K 330.2 320.7 n/a n/a

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