All turnover brackets appear to have increased their current borrowings for 2018/19, apart from £10-25m which saw a slight drop of 4%. Working capital remained stable for turnovers of £5-150m year on year, with an increase in 2018/19 for turnover brackets of £150m+.
All turnover brackets appear to have increased their current borrowings for 2018/19, apart from £10-25m which saw a slight drop of 4%. The £150- 200m bracket showed the highest increase in higher current borrowings (up 51.7%) in comparison to the other turnover brackets.
The £5-100m groups all displayed relatively stable long-term borrowings across the data timeframe. In contrast to this, the companies within the £100- 150m bracket reduced their long-term borrowings year on year, although compensated by increases in short term borrowings. One doesn’t expect to see material changes in borrowings for those companies in the turnover brackets between £5 – 100m as they tend to struggle to obtain bank funding. Those in turnover brackets from £100–200m+ will see borrowings that fluctuate depending on the nature of their work and their investment strategies. For the companies with turnover over £200m, they have increased their total borrowings.
Working capital remained stable for turnovers of £5-150m year on year, with an increase in 2018/19 for turnover brackets of £150m+. Businesses over £200m+ turnover saw a slight uplift in working capital from last year (up 0.66%). Although £200m+ turnover companies have experienced a reduction in turnover, margin and pre-tax profit, they have materially improved their working capital. This has been an objective of the larger corporations following the demise of Carillion.
Please read the full report here: 2019 MHA UK Construction Sector Report
If you would like to discuss any of the issues raised in more detail or if you would like to speak with a member of our Construction & Real Estate team about how we can help, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with your local representative.