Upward turnover trajectory continues for MMC contractor

Northumberland-based offsite specialist Merit Holdings Ltd has reported strong turnover and pre-tax profit growth in its latest annual accounts.

Revenue reached £94.3m for the year ending 30 June 2023, marking a 48 per cent year-on-year increase compared with the 2021/22 total of £63.7m. Turnover in 2020/21 was £41.8m.

In his strategic report accompanying the accounts, Merit director Matthew McGrady said: “We are now seeing the benefits from our market strategy and from our considerable investment in IP [intellectual property], particularly our [proprietary] product platform approach.”

He added that Merit expects the higher turnover trend to continue in the current financial year, with foreign sales in the offing.

McGrady said: “We believe we will continue to grow at a rapid pace to satisfy the demand across all our key markets, not just in the UK but also overseas, particularly in the US.”

The higher turnover helped Merit to double its pre-tax profit, which rose from £4m to £8.3m. The contractor’s margin widened from 6.3 per cent to 8.8 per cent in 2022/23.

Merit – winner of the Offsite Specialist of the Year trophy at the Construction News Specialists Awards last September – paid out £3m in dividends compared to nothing in 2021/22.

Its year-end cash reserves held steady at £6.7m, marginally higher than the previous year’s £6.6m, despite what McGrady described as “significant investment” in fixed assets throughout 2022/23.

These investments almost doubled from £7.8m to £13m.

He added that further expansion of Merit’s factory capacity was “imminent”, following a 44,000 square foot extended high-bay facility (pictured) becaming operational last June.

The modern methods of construction contractor claims its current 270,000 square foot factory in Cramlington can deliver £300m-worth of capital projects per year.

Merit employed a monthly average of 305 staff in 2022/23, up from 218 in 2021/22.

According to McGrady, the firm consistently invests 6 per cent of its revenue in research and development. He added that output per employee reached £290,000 in the latest financial year compared with £275,000 in 2021/22.

Completed projects in 2022/23 included a £66m job to build the UK’s first CAR-T therapy manufacturing facility for Autolus in Stevenage, Hertfordshire, and a £45m expansion of Piramal’s antibody drug conjugate manufacturing facility in Grangemouth, Scotland.

Ongoing new-build jobs include a 10,500 square metre, £35m community hospital for Berwick-upon-Tweed; an operating-theatre block at Solihull Hospital, West Midlands; a sterilisation/decontamination centre for Northumbria Healthcare NHS Foundation Trust; and a modular clinical biomarker laboratory for Moderna as part of the pharmaceutical giant’s new innovation and technology centre in Harwell, Oxfordshire.

Merit is also scheduled to complete a 2,000 square metre therapy unit for Norwich Community Hospital this year.

Merit’s strong financial performance stands out as several other offsite specialists have collapsed in recent years, including Ilke Homes, House by Urban Splash, Mid Group, Eco Modular Buildings and Caledonian Modular.

Institutional investor L&G also wound down its offsite business after years of heavy losses, and Laing O’Rourke announced last month that it aims to cut 60 jobs at its offsite factory.

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