WET News

22 LEADERS 2018 THE LEADERS 2018 High-value work and innovation power Murphy Gross margin % J. Murphy & Sons 50.5 Mott MacDonald 38.1 Stantec 34.4 Stonbury 31.4 Lanes 28.5 North Midland Construction 27.0 George Leslie 24.6 Veolia 21.1 Amec 10.8 Black & Veatch 10.6 G lobal Infrastructure specialist Murphy is a mainstay of the UK water contracting scene, taking on a diverse portfolio of work including engineering, connections, tunnelling, pipelines, plant and streetworks. As well as working directly for water companies, Murphy is a strategic partner in several joint ventures and alliances, including AMK, KMI+, Optimise, Thames Water Infrastructure Alliance (IA) and eight2O. Recent years have seen turnover for the overall business decline slightly, but there has been an upturn in profits and margin. The family-owned business also has a new leader with a familiar surname, as John Murphy, grandson of the business's founder and formerly the chief operating officer, took over on the departure of Steve Holl- ingshead in December 2017. Its water busi- ness has been led by Stuart Rothery since April 2016. The company has said it wants to con- centrate on civils and process engineering in order to be considered a Tier 1 contractor across the multiple sectors it operates in. Its 10-year plan for growth, outlined in 2016, sees it focus on four main sectors – rail, water, power and natural resources – building on long-standing relationships it has built up over more than 60 years. Last year the company expanded its presence in Ireland with the acquisition of AECOM Design & Build Ireland (ABDI), a™er which it was awarded a 25 million euro contract by Irish Water to design and build J. Murphy & Sons Hiview House, Highgate Road, London, NW5 1TN. Tel: 020 7267 4366. www.murphygroup.co.uk treatment plants in County Louth. The acquisition meant that at a single stroke Murphy's water business increased in size by 20 per cent. New client wins in recent times have included Gatwick Airport, SES Water and Affinity Water. The company is putting the emphasis of its water sector business on innovation, in particular data capture, handheld technol- ogy, bespoke apps, and the automation of water treatment plants. It has stated an intention to be a player in ever more com- plex types of work, overcoming customer perception of its traditional strengths of rapid response and repairs. As Rothery put it in a column for WWT last year: "There's more to us than digging holes." Murphy recorded the highest gross margin (50.5 per cent) of any company on the Leaders database – with the ratio for 2016 proving 23 per cent better than the pre- vious year. Gross profits of £310.2 million for 2016 were also something to celebrate – a 20 per cent increase on the previous 12 months. As a provider of intelligent and efficient solutions for the water sector, Murphy sup- ports clients that include Thames Water, Irish Water, United Utilities, Northern Ire- land Water, Affinity Water and South East Water. It works on current AMP6 frame- works for clients including Thames Water, SES Water and Bristol Water on water resil- ience programmes, leakage reduction, net- work maintenance, trunk main renovation, mains renewals and lead pipe replacement programmes. It also offers services that complement its full range of water sector capabilities, such as flood alleviation, tun- nelling, pipelines and piling. Recent successful projects include the Deephams STW upgrade for Thames Water. Delivered through AMK, the joint venture between AECOM, Murphy and Kier – this £177 million contract on phase two of the rebuild of London's largest sewage works was a crucial project to improve water quality of the River Lee, reduce odour and meet tighter environmental standards. Other major work completed for Thames Water has included a major programme to replace 600km of Victorian cast iron mains, which was a huge undertaking that show- cased Murphy's traditional strengths in the streetworks sphere. THE NUMBERS 2012 2013 2014 2015 2016 % change Sales £m 568.5 665.9 657.7 629.1 613.9 -2 Gross profit £m 219.1 242.4 278.4 258.4 310.2 20 Operating profit £m 17.2 7.5 -15.9 2.5 15.4 512 Pre-tax profit £m 21.9 34.7 -9.7 13.8 23.3 69 Staff 3,471 3,951 4,278 3,660 4,172 14 Net assets £m 203.5 219.7 200.9 207.5 214.2 3 THE RATIOS 2012 2013 2014 2015 2016 % change Return on capital % 10.8 15.8 -4.8 6.7 10.9 63 Gross margin % 38.6 36.4 42.3 41.1 50.5 23 Operating margin % 3.0 1.1 -2.4 0.4 2.5 527 Net margin % 3.9 5.2 -1.5 2.2 3.8 73 Sales/employee £k 163.8 168.5 153.7 171.9 147.2 -14 Water chief Stuart Rothery

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