Building services contractor Lorne Stewart is aiming to double in size and become a top five M&E contractor within the next five years – and is ready to make acquisitions to do so.
The Harrow-based firm this week revealed that turnover fell 18.1 per cent to £183.4 million for the year to 31 December 2009.
But pre-tax profit rose 4 per cent to £6.3m, while operating profit was up 54.9 per cent to £5.6m. Lorne Stewart finished 2009 with £28.2m of cash in the bank, and bosses are actively looking at acquisitions to help reach the target of £400m turnover by 2015.
Lorne Stewart’s contracting business contributed around £130m of 2009 turnover, with the
remaining £50m coming from its construction services business. The aim is to increase both divisions to £200m businesses.
Lorne Stewart finance director Puliyelethu Mathew said: “The aim is to become a £400m business within five years through acquisition and organic growth.
“We are looking for new opportunities, particularly on the services side, and we are targeting the energy sector. It could well be an acquisition worth more than £10m if it is a good opportunity. We are actively looking at the moment.
“One advantage for us is that we do not need to go through a big process – a decision to make an acquisition can be made in one phone call. It could be a bold move, but we are bold enough.”
The group cut its costs significantly in 2009, reducing staff numbers to 1,406 at the end of 2009, from 1,706 the prior year. The wage bill was reduced by 14.4 per cent to £59.9m from £70m in 2008.
Mr Mathew said: “This is a strong business with profit growing year on year. The main reason forour current position is we have controlled the costs carefully.”
Lorne Stewart works as a building services contractor for many of the top main contractors, including Carillion, Costain, Bovis Lend Lease and Bam Construct. South and east divisional
managing director Patrick Churchard said: “We know clients are looking at cash when deciding who to work with.
“If you look across the sector our cash position is strong, which is important in a recession.”
The group’s contracting jobs range from £500,000 up to £40m. Its largest job at the moment is a £30m contract to carry out the building services at Caerphilly Hospital in Wales for Bam Construct.
The firm is also on the Ministry of Defence’s Single Living Accommodation Modernisation
housing framework and is working on the Birmingham Building Schools for the Future project with Bovis Lend Lease.