McLaren joins £1bn contractor club as pre-tax profit nearly doubles

Tier one contractor McLaren Construction’s annual turnover has exceeded £1bn for the first time and pre-tax profit almost doubled, as it eyes further growth to mark its 25^th birthday this year.

The firm hired more staff last year and is pursuing opportunities in the healthcare and data centre sectors, but has voiced caution about the life sciences market.

The London-based contractor reported turnover of £1.12bn in the year to 31 July 2025 – up 21 per cent from the previous year, according to its latest audited accounts.

The turnover figure accurately reflected group chief executive Paul Heather’s prediction of £1.1bn that he made last year.

Speaking to Construction News shortly before the audited results were released, chairman Kevin Taylor said the firm was “on target” to post turnover of £1.25bn in its next set of results.

The firm is now on 24 frameworks – two more than last year – as diversification into the public sector contributed £250m to group turnover.

Taylor said he had his “fingers crossed” that the firm can win work on the “exciting” NHS New Hospital Programme (NHP), where it is one of 16 shortlisted bidders for up to 11 slots on a £37bn framework.

But the contractor said it was not actively targeting life sciences jobs.

On the one hand, Heather said that the sector overlaps with McLaren’s existing capabilities, but he also said: “We haven’t seen a pipeline that we thought we would see. It’s certainly not in the place that we hoped.”

He added: “That said, if we’re invited to tender, we would be interested.”

New business

McLaren was ranked 25th in last year’s CN100 table of top contractors, but the latest performance would have seen it shoot up to 18th place.

The accounts said McLaren was engaged in more than 81 active projects last year – including eight in the United Arab Emirates.

Of the overall total, 21 were in negotiation, 31 were live on site and 29 were completed by the end of the financial year.

Prominent new business wins in the year included a £280m Cardiff arena and hotel job (pictured) with close involvement from its Construction Management & Specialist Projects division, which was set up last August to target large-scale real estate and public sector projects.

“They’ve already been wearing out their shoe leather in terms of knocking on doors and just explaining our construction management capability,” said Heather.

“That’s something we’re going to push hard with, and we think we’ve got the right expertise in the business to do it.”

Apart from the Cardiff job, early construction management successes include a role in an unnamed energy project in England, he added.

Taylor said “repeat customers that have the faith and give us work” represented the bedrock of McLaren’s revenue.

Heather added that repeat business accounted for “75 to 80 per cent” of overall group turnover.

“We treat all of the projects in the same way, and they’re given the same gravitas that they all deserve,” he said.

“That’s why we’ve got that amount of repeat customers. Because we’re not in it for the one-offs, really.”

Pre-tax profit surged from £11.9m to £21m, as the firm’s margin broadened from 1.3 per cent to 1.9 per cent.

The improved result translated into a higher return on capital employed of 20.4 per cent, compared with 12.2 per cent the year before.

Profit was 10 times higher than 2022’s figure of £2m, when McLaren returned to the black after two consecutive loss-making years during the Covid pandemic.

The accounts said the combined London and South business continued to “maximise market opportunities”, while the Midlands and North unit maintained momentum in industrial, logistics and public sector work.

Heather highlighted ongoing work by the Yorkshire and North East division, formed in the 2023/24 financial year, on the York Central regeneration scheme with sister firm McLaren Property.

“We’’ve got a nice, small, lean team there, picking up some nice projects,” he added.

“They’re still in PCSAs [preconstruction services agreements] on a number of schemes, so we’ve not converted anything [yet]. But for the trading year we’re in now, they’ve picked up two or three PCSAs that they’re working through.”

Strengthened balance sheet

The balance sheet strengthened during the year, with cash at bank and in hand rising to £80.9m, up from £67.3m.

The group reported no external bank borrowings. But despite its stronger liquidity, Heather said acquisitions “are not high on the agenda”.

The strategic report stated that McLaren had invested more than £2.5m during the year in “enhanced business systems, governance and risk management, technical and specialist resource and digital delivery systems”.

It said this investment was intended to “support diversification into growing sectors such as health, defence, data centres and education, while meeting evolving customer expectations and regulatory requirements”.

Technology investments have enabled McLaren’s staff to spend less time tied up with administrative paperwork and more time “out on the park enjoying their job”, said Heather.

Headcount rose from 912 to 1,082 employees, mainly due to recruiting 150 more site managers and senior managers.

The hiring spree contributed to a 25 per cent hike in the firm’s annual wage bill from £74.8m to £92.6m.

Looking ahead, the strategic report said turnover was “expected to increase further into 2026” as PCSAs converted into main contracts.

Potential examples include a data centre for an unnamed client in east London, where CN understands McLaren is already on site under a PCSA.