This year’s index sees a welcome expansion in turnover and profit for the 10 largest ground engineering firms – but postponed projects look set to send the sector’s next round of results in reverse.
Across the board, turnover increased by 26 per cent to £1.09bn while average pre-tax profit margin sat at 5.4 per cent.
All 10 firms were profitable in their most recently reported financial years, with all bar two – Keller and Cementation Skanska – seeing their pre-tax profit rise. The 10 sector leaders therefore saw their combined pre-tax profit rocket by 71 per cent to £59.1m. Growth was notably driven by Fugro, which sits fourth overall but topped the profit rankings at £9.7m.
Sales also increased. Bachy Soletanche rose to the top of the table after hiking revenue by £105.3m, or 91 per cent. Previous table-topper Keller fell two places after its UK turnover dropped by £2.8m, making it the only top-10 firm to see sales fall. Van Elle remained second after a 26 per cent revenue hike, while Bauer joined the index at number nine, displacing McAuliffe.
Despite the positive headline financial figures, industry figures warn that declining workloads in 2024 are yet to play out in balance sheets. “2024 has been a tough year for construction and this has been mirrored with our members,” says Malcolm O’Sullivan, chair of the Federation of Piling Specialists and chief operating officer of Van Elle. “The change of government and the Building Safety Act has stifled investment in the construction sector, which has reduced the number of live projects and resulted in lower workload and margins.”
Housing work has been slowed by increased mortgage rates, inflation, new fire regulations and planning. Chris Campbell, business development and preconstruction director at Cementation Skanska, adds that commercial office markets are still grappling with post-pandemic work patterns, while his firm also “experienced delays in the commencement of some major transportation projects.”
Robert Fox, managing director of Cognition Land and Water, says the decision to cancel or postpone high-value HS2 works has had “a big impact on the industry” as “many companies previously involved in HS2 are now competing for a smaller pool of contracts”.
As O’Sullivan explains, project delays “add costs to the piling contractor who has the resource waiting to start the project, and these costs are seldom recoverable from the customer. There is a surplus of resource across the ground engineering sector that is putting pressure on margins as the competition for live projects grows.” Project delays also increase the risk that margins will be eroded by further inflation when work restarts, although inflation has largely eased.
On a positive note, the government has committed to deliver 300,000 homes a year and streamline planning. Piling and site investigation for the energy sector is expected to become a major source of work – as is significant investment proposed by water companies. Many ground engineering firms are looking to diversify into the markets where workloads are expected to increase, such as defence and industrial.
“The good news is the last quarter of 2024 and into 2025 is seeing an increase in potential ground engineering projects coming to market,” says O’Sullivan. “There is definitely a more positive outlook in 2025.”
UK’S TOP 10 GROUND ENGINEERING CONTRACTORS
| 2024 | 2023 | Change | Company | Revenue (£m) | Change (%) | Pre-tax profit (£m) | Pre-tax margin (%) | Year ending | |||
| Latest | Previous | Latest | Previous | Latest | Previous | ||||||
| 1 | 3 | 2 | Bachy Soletanche | 221.63 | 116.32 | 91 | 8.01 | 4.34 | 3.6 | 3.7 | 31/12/2022 |
| 2 | 2 | = | Van Elle | 148.73 | 117.64 | 26 | 5.37 | 3.52 | 3.6 | 3.0 | 30/04/2023 |
| 3 | 1 | -2 | Keller | 124.62 | 127.43 | -2 | 4.54 | 7.92 | 3.6 | 6.2 | 31/12/2023 |
| 4 | 5 | 1 | Fugro | 120.72 | 89.75 | 35 | 9.71 | 0.31 | 8.0 | 0.3 | 31/12/2023 |
| 5 | 4 | -1 | Socotec | 112.58 | 109.11 | 3 | 3.68 | 2.21 | 3.3 | 2.0 | 31/12/2022 |
| 6 | 6 | = | Roger Bullivant | 97.43 | 78.21 | 25 | 7.50 | 3.24 | 7.7 | 4.1 | 31/12/2022 |
| 7 | 7 | = | Cementation Skanska | 88.93 | 88.24 | 1 | 2.75 | 4.28 | 3.1 | 4.9 | 31/12/2023 |
| 8 | 8 | = | Aarsleff | 78.59 | 59.08 | 33 | 7.62 | 3.93 | 9.7 | 6.7 | 30/09/2023 |
| 9 | NEW | NEW | Bauer | 52.25 | 33.23 | 57 | 5.50 | 1.00 | 10.5 | 3.0 | 30/09/2023 |
| 10 | 10 | = | Dawson Wam | 46.39 | 24.18 | 92 | 4.46 | 1.73 | 9.6 | 7.2 | 31/12/2022 |
