CN Specialists Index 2024: top 10 fit-out contractors

In the first-ever CN fit-out index, Morgan Sindall subsidiary Overbury leads the pack with turnover of £1.01bn for the year to 30 March 2024, marking a 15 per cent year-on-year increase. Its revenue surge generated a pre-tax profit of £71.2m and a pre-tax margin of 7.1 per cent – healthy by the standards of the construction sector.

Second-place BW Interiors delivered a 1 per cent margin in its most recent accounts, despite a 49 per cent turnover increase to £216.3m and healthier pre-tax profit of £2.2m. The firm said it improved its financial performance partly through “an increasing number of frameworks”, but its cost of sales soared from £134m to £202.9m.

Structure Tone finished third with 11 per cent year-on-year revenue growth as it turned a £130,000 loss into a £1.3m profit. It was one of two firms to bounce back into the black, alongside seventh-placed 8Build.

Eight firms saw higher turnover compared with their previous financial years and all bar one posted a profit.

In its latest accounts, Willmott Dixon Interiors described 2023 as “an enormously difficult year”, as insolvencies and inflationary pressures led to higher project costs. The firm’s revenue only decreased by 2 per cent to £130.9m but it tumbled into a £25.7m loss, which included £5.8m attributable to the collapse of a single unnamed supply-chain partner.

Speaking to Construction News, Iain McIlwee, chief executive of trade body the Finishes and Interiors Sector (FIS) notes that fit-out demand, especially in refurbishment projects, “has surged”. He says clients in the offices sector are focusing on upgrading spaces to meet evolving tenant expectations. “People want to attract workers back to the office, which means investing more in less space,” he says.

While there may be less urban office space overall since the pandemic, the push for Grade A office environments that offer premium features and design has resulted in “an awful lot of refurbishment activity”. McIlwee says this shift has helped keep fit-out firms busy, particularly in upgrading and transforming existing spaces to meet new standards.

He highlights sustainability as a key factor shaping the future of the fit-out industry. “We’re seeing more effort towards improving sustainability, and it’s pushing innovation,” he says, citing a trend towards modularity in construction.

However, slim margins are a concern. The fast-paced nature of the work, characterised by rapid turnarounds, means that even minor design changes can lead to significant financial strain. “It only takes one or two bad jobs to drag you down,” McIlwee says. This was the case with £139m-turnover Beck Interiors, which would have occupied third place in the index but fell into administration in July this year.

Economic uncertainties and project delays could challenge the fit-out sector in the coming months but with proper planning and a focus on sustainability, McIlwee believes firms could see better margins in the near term.

There is a sizeable dark cloud on the horizon, though. ISG’s fit-out business turned over £567.8m in its most recent accounts. It would have been in second place but the firm entered administration in September. “Many businesses [in the supply chain] are, for no fault of their own, now exposed to significant losses and uncertainty on current programmes,” says McIlwee.

UK’S TOP 10 FIT-OUT CONTRACTORS

Notes: Overbury Part of Morgan Sindall. Willmott Dixon Interiors Part of Willmott Dixon. Morgan Lovell Part of Morgan Sindall.