Construction firm breaks half-a-billion-pound barrier in year of ‘significant changes’ in real estate
A Leeds-based global construction consultancy has reached a turnover of £548m in a year of “significant changes” in the real estate sector.
Turner and Townsend, based in Horsforth, has published its results for the year ended April 30 2018, which showed that pre-tax profits jumped to £54.6m from £46.5m the previous year. Turnover grew 12% to £548.7m, a rise from £491.5m in 2017. As well as success across the UK, revenue growth was also particularly strong in Africa, the Americas and Australia.
The firm completed the acquisition of MML, a Kenya-based project management consultancy business, in February 2018.
The growth in revenue was strong in real estate (11.5%) and infrastructure (15.4%), giving combined growth of 13%. After three years of revenue decline in “extremely challenging market conditions”, revenue in natural resources reported annual growth of 8.2%, said the firm. EBITDA was reported at £55.5m, a rise from £47m for the prior year.
Turner and Townsend employs 5,209 staff across 90 nationalities. In the last year, projects it been involved with include airport expansions at Al Maktoum Airport in Dubai, Western Sydney, Vancouver and Toronto Pearson.
Murray Rowden, managing director of global infrastructure, said it was a dynamic marketplace. He said: “In a year of outstanding success in aviation, our work in North America includes Houston, San Francisco and Toronto Pearson Airports; in the UK, with Heathrow and Luton; and in Europe, with Amsterdam’s Schiphol Airport and Fraport. In the Middle East, we’re working on Al Maktoum in Dubai; the three-runway expansion of Hong Kong International Airport in Asia, plus early-stage BIM set up for another major Asian airport. We’re working with all major airports in Australia; with VINCI and Lima Airport Partners in Latin America; and Airports Company South Africa (ACSA) in Africa.
“In rail, we’re working on every Australian light rail project, in Canada on Metrolinx, and further work with Doha and Dubai metros in the Middle East. We are providing early-stage estimating, procurement and project controls on high speed projects including High Speed 2 in the UK. In both the UK and US, we have secured contracts with mass transit operators to help mature their asset and programme management capability.
“In power and utilities, we are providing project control services on multi-billion-pound programmes including EDF’s Hinkley Point C in the UK, and continuing our strong performance in water through our relationship with leading companies like Anglian Water, Welsh Water and South Australia Water.”
Vincent Clancy, chairman and chief executive, said: “There were significant changes in the real estate sector. The biggest shift has been the increase in demand from high-tech clients as they become the largest consumers of office, research and development and data centre space. The renewal of cities as demand for accommodation and social infrastructure has also increased. Our capability in cities as well as on major programmes has enabled us to be beneficiaries of these trends.”
He said there had also been a demand for aviation, rail and power to increase globally, adding that capacity, carbon and affordability continued to be the key challenges. Clancy said: “We have established a new business unit, Programme Advisory, which focuses on setting up major programmes for success. Armed with global best practice and data from the world’s largest programmes, it will provide real insights and I am confident that Programme Advisory will grow to be a significant part of our business over the coming years.
“After a number of challenging years, activity in natural resources increased. The rise in oil price gave operators confidence to invest and, in parallel, the mining sector strengthened as the price of several commodities rose following stable demand. Looking forward, we expect this demand to continue as new projects come on stream and the outlook remains positive.”
Cash generation continued at a strong level through the financial year. This resulted in free cash flow of £38.5m (2017: £39.4m). Turner and Townsend said: “Working capital management continues to be a key discipline across our business. As our geographic reach has extended, significant attention continues to be placed on establishing appropriate working capital management behaviour in all territories, and this has been key to maintaining our strong cash flow performance.”
Clancy added: “Market volatility, rapid client change and increasing geopolitical tensions have all been characteristics of the last year. The good news is that our business resilience and our ability to embrace change has allowed us to deliver our eighth year of consecutive growth.
“Looking forward, we expect the headwinds in the markets we operate in to continue to grow. Despite this, I believe the investment in our capability, long-term thinking and commitment to doing business responsibly will provide a platform for even greater success.”
