Engineering and services group bounces back into profit

Independent engineering and services business, NG Bailey, has reported a return to profitability.

For the year ending 1 March 2024, the Leeds-headquartered business reported annual turnover of £600m, up from £532m in 2023, with an underlying operating profit of £11.2m (2023: a loss of £17.3m).

The group has maintained its strong balance sheet with net assets of £129m (2023: £121m), including cash and investments of £70m (2023: £83m) and, since the end of March 2023, has no external debt.

The group’s order book also remains healthy, increasing to £1.4bn (2023: £1.3bn).

NG Bailey says its growth has been driven by the strong performance of the Services division, which delivered record levels of profitability for the second year in a row.

Its Engineering division is also back in profitability, supported by renewed focus on governance, quality margins and risk management.

The small number of legacy long-term fixed price contracts, which were adversely hit by Covid-19 and inflation, are now complete and the cash outflows behind the company.

Jonathan Stockton stepped into the role of chief executive on 1 June 2024 following David Hurcomb’s retirement after 14 years of leadership.

Hurcomb will remain within the business until a small number of commercial matters on legacy contracts to recover value are resolved.

He joined the group in 2016 and has held several senior roles within the business, most recently as chief operating officer.

Stockton said: “NG Bailey is in a strong position as we continue to execute our diversified business strategy, the success of which is evidenced by our return to profitability even in the face of tough trading conditions.

“This is testament to our high-quality order book and our market leading capability to provide services across building construction, infrastructure, and services, alongside the quality, expertise and commitment of our teams and experienced management.

“With a growing pipeline of work in recession-proof markets and strong credentials in the energy and decarbonisation sectors, we have confidence that we will be able to successfully deliver our growth plans, with a clear route to pre-pandemic levels of trading and beyond.”

NG Bailey says its Services division has continued to perform well, with all three business streams; Facilities Services, IT Services and Freedom, increasing in turnover and either meeting or exceeding their budgeted profitability as the group continues to execute its diversified business plan.

The Services division’s turnover, headcount and order book now accounts for broadly half of the overall group, which has been driven by organic growth as well as selective, low risk acquisitions which have increased capability, geography and resilience.

The group notes its Engineering division is well placed for the future, with a renewed focus in markets where it has expertise and experience.

Stockton added: “While market conditions remain challenging, we remain highly selective around the work we secure.

“We remain committed to being a responsible business by focusing on paying our supply chain on time and are proud that we are consistently a top performer amongst our peers in this regard.

“This is in contrast to the wider industry where a culture of late payments and underpayments remains prevalent.”