GMI Construction Group plc reports strong profits growth for year ending Sep 30th 2024

GMI Construction Group plc has delivered a strong financial performance by fulfilling its strategy of ‘controlled consolidation’ focusing on profitable opportunities that deliver real bottom line improvement. This approach has resulted in strong profit growth with a targeted and deliberate reduction in turnover.

The gross margin increased to 3.2% (2023: 2.6%), however this included an exceptional historic matter, the settlement of a long-standing project, without which gross profit margin would have been £15.2m (6.3%).

Key projects have included, Avon Street, a significant student accommodation development in Bristol providing study bedrooms, studios, management suites and communal facilities.

The expansion of Leeds City College’s new Mabgate campus, which will transform the site and create 70,000sft of additional educational space and contribute to the regeneration of the area and provide much needed community resources.

A multi-million pound extension and upgrade to the Centre of Excellence in Sustainable Advanced Manufacturing on behalf of Sunderland City Council, a development, which enables Japanese-based manufacturer JATCO to commence the production of innovative 3-in-1 electric vehicle powertrains for Nissan’s nearby plant.

No.3 Circle Square – the latest phase of specialist, cutting edge workspace to be developed at Manchester’s Circle Square neighbourhood within the Oxford Road Corridor knowledge quarter. The £87m, 267,000 sq. ft development, is being brought forward by Bruntwood SciTech, a joint venture between Bruntwood, Legal & General and Greater Manchester Pension Fund.

The business has carefully focussed on strategic evaluation of all projects in line with GMI’s key principles of ‘Price it Right’, ‘Contract it Right’ and ‘Deliver on Time’. The result has been to continue business performance improvement after recovering from the impacts of inflation and economic uncertainty, which impacted throughout the construction industry over the last few years.

The strategic approach has led to an improved pipeline of high-quality work for the year ending 30th September 2025, with the firm already securing turnover with a value of £217m for the current financial period.

The strategy to reduce turnover has resulted in increasing profit before tax to £1.04m (2023 £0.92m) and a significant improvement in cash at bank of £19.3m (2023 £10.2m).

Gareth Jones, Group Managing Director of GMI Construction, said: “The business is targeting stable and controlled growth for future financial years, applying the rigour and stress tests to carefully consider risks on projects. Significant improvements in systems and information now allow data-driven assessments. These are used in conjunction with prudent business practices and a risk-averse strategy to enable sound commercial decision making.

“The four regions that GMI operates in are all now established and thriving. These are Yorkshire, North East England, North West England and the Midlands. This regional focus will continue, empowering each region to drive opportunities and growth through their individual relationships and knowledge whilst being supported from group for central functions coupled with controls for overall group consistency and to leverage efficiencies.”

GMI Construction has continued to build on previous years to increase the proportion of projects delivered via public frameworks, which has gained steady momentum, with further frameworks and opportunities targeted for the next financial year.

GMI Construction is committed to continued investment in support infrastructure and new and emerging technology. It has continued to develop its in-house Building Information Modelling (BIM) services, alongside the deployment of BIMCollab as its modelling software, and further individuals having achieved the buildingSMART Professional Certification. It is also leading the way in utilising AI technology to access key elements of the complex legislation within the Building Safety Act, as part of an Innovate UK project.

Gareth Jones commented: “The increasing complexities posed by new legislation, including the Building Safety Act and the requirement for a Golden Thread on every project have focused GMI to develop new and innovative solutions, including a project collaborating with Leeds Beckett University and innovative tech firms to utilise AI.

“This project has been awarded £1.2m of funding from Innovate UK shared between GMI and the project collaborators and is due to complete in the next financial year. These initiatives, coupled with GMI’s commitment to project excellence will further strengthen our offering and the relationships we value with our key clients whilst continuing to drive successful and sustainable profitable growth”