Last year鈥檚 review of the top 20 earthmoving specialists painted a confused picture: some contractors had surged ahead, picking up plenty of work and turning a good profit; others seemed stuck in the doldrums with several struggling to win contracts and some trading at a loss.
This year, the picture is somewhat clearer 鈥� and, overall, brighter. Although five of the top 20 still reported a fall in turnover in their latest figures (the corresponding figure last year was seven), and five saw their pre-tax profit figure decline (nine聽companies last year) overall revenues have聽increased substantially and so has profitability.
Total revenue for the sector鈥檚 20 leading firms, according to the latest figures filed with Companies House, is 拢832.8m 鈥� a more than 15% increase on the previous figure of 拢721.1m. Last year, the same tranche of the industry managed to grow turnover聽by only 6.5%.
Similarly, whereas we recorded a 13.8% increase in pre-tax profit last year, our latest research shows that the top 20 earthmovers grew pre-tax profits by more than 27%, from 拢45.1m to 拢57.5m.
There is still, however, quite a lot of jockeying for position on the table. Collins Earthworks, for example, has jumped into second place from fifth, thanks to an almost 60% surge in turnover during the year to November 2018.
Collins 鈥� a privately-owned company based in Kirkby-in-Ashfield, Nottinghamshire 鈥� is a no-nonsense, what-you-see-is-what-you-get earthmoving specialist with a focus on its local market. Its business model clearly works well; besides occupying the number two position for turnover this year, Collins is also notched up the second-highest profit before tax 鈥� which it also did last year.聽
While Collins Earthworks is a solid performer, there鈥檚 a large gap between it and first-placed M&J Evans Construction, with a turnover of 拢130.3m over the same period (year to November 2018). Evans鈥� 28% increase in turnover was accompanied by an 18.6% increase in pre-tax profit, from 拢22m to 拢26.1m.聽
The company not only made the biggest pre-tax profit last year, it was also the most profitable, with a whacking 20% margin.
And yet, despite its significant lead, M&J Evans has only recently come to dominate the sector. Until two years ago, the leader of the pack was CA Blackwell which, in 2016, came close to breaking through the 拢100m-turnover threshold. Then, M&J Evans was in second place on the table, with turnover nudging 拢70m.
CA Blackwell was taken over in January 2016 by opencast mining group Hargreaves Services. The subsequent full financial year saw turnover dip from 拢98m to 拢65m. Since then, CA Blackwell has been trading consistently in the red with a pre-tax loss of 拢7m in the year to 31st聽May 2017.
Last year, turnover slipped further to just over 拢50m 鈥� but at least the losses weren鈥檛 quite so bad: only 拢5.3m in the red for the year to 31st May 2018. Despite the losses, CA Blackwell is still a force to be reckoned with and with the financial might of Hargreaves (around 拢300m annual turnover), Blackwell is still able to invest in the fleet.聽
叠濒补肠办飞别濒濒鈥檚听plant聽is used within both its own and Hargreaves鈥� operating markets of聽earthmoving, surface mining, quarrying and materials handling. Blackwell is one of the two leading earthmoving contractors to have dominated the 拢1.5bn A14 upgrade project in East Anglia.
The other big name on the A14 is Walters UK, based in Hirwaun, South Wales. Walters鈥� most recent figures, for the year to March 2019, show continued prosperity with turnover up more than 28% from 拢47.1m to 拢60.4m. Its rather lacklustre profit margin (only 1% last year, with a pre-tax profit of just 拢500,000) has rallied to 3.8%, yielding a profit before tax of 拢2.3m.
鈥淲ithin the period, the company has again continued to successfully undertake and complete large earthwork schemes within the roadworks and infrastructure sector UK-wide and has successfully been awarded contracts direct for Welsh government and local authorities,鈥� said the company.
It added that 鈥渟ecuring high value 鈥榚arly contractor involvement鈥� projects鈥� continues to be a priority, but that 鈥渢he growth in its regional general civil engineering, remediation and development work is playing an increased part [in] the company鈥檚 business strategy鈥�.
Another strong performer is Fred Champion Groundworks, headquartered in Liskeard, Cornwall. Identified last year as one of Cornwall鈥檚 10 fastest-growing companies, Champion achieved a 35% increase in turnover (from 拢49.5m to 拢66.98m) during the 12 months ending 30th September 2018.
Pre-tax profit also more than doubled, from 拢3.2m to 拢6.5m over the same period.
Although earthmoving remains Fred Champion鈥檚 core activity, the company鈥檚 steady growth has resulted in the emergence of a number of sub-divisions. The company now offers in-situ concrete and scaffolding services, for example.
Even the muckshifting operation has been divided into two semi-autonomous divisions:聽
鈥淥ver recent years we have expanded our groundworks business to include bulk excavation earthworks,鈥� says the company. 鈥淲e have developed this section of the company because we found that in some instances earthworks packages were being offered separate to the groundworks package. We are now able to offer the full benefit of bulk earthworks economy to our overall groundworks operation.鈥�
At the other end of the country RJT Excavations, located in Jedburgh in the Scottish Borders, has had a much rougher ride than Fred Champion. Its turnover for the year to the end of May 2018 was down nearly 40%, from 拢23.6m to 拢14.4m. Consequently, the company fell from 15th place on the table to 19th.
Pre-tax profits also tumbled, from 拢2.4m in 2017 down to 拢1m in 2018.
RJT Excavations carries out general earthmoving and groundworks contracts, plus associated activities such as crushing and screening for quarry operators and plant hire. It says that the market sectors it serves 鈥渁re considered to be sustainable and profitable for the long term鈥� and that demand for its services is 鈥渞easonable for the foreseeable future鈥�.
However, it describes the market as 鈥渃hallenging鈥� and while both turnover and profits were down, the results were in line with expectations and are regarded by the directors as 鈥渁 good result in a very challenging marketplace鈥�.聽
鈥淭he underlying business continued to perform in line with expectations,鈥� it adds.
At present, it鈥檚 hard to know what to expect with the current uncertainty over the future of HS2 鈥� the big-ticket item for the UK鈥檚 earthmoving sector. The main enabling-works contracts were awarded 18 months ago, but precious little of it has actually got underway, and recent debate over whether to forge ahead, modify the project or scrap it entirely has not helped.
At the time of writing, prime minister Boris Johnson had yet to decide whether or not to give HS2 its final go-ahead 鈥� though the signs appeared good. The directors of the 20 companies listed on this page are no doubt waiting with bated breath.聽
This article was first published in the聽聽(magazine published online,聽25th of each month.)聽
UK readers can have their own copy of the magazine, in real paper, posted through their letterbox each month by taking out an annual subscription for just 拢50 a year.聽
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