{"id":515217,"date":"2025-03-04T10:55:27","date_gmt":"2025-03-04T10:55:27","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=515217"},"modified":"2025-03-04T10:55:27","modified_gmt":"2025-03-04T10:55:27","slug":"how-small-projects-grew-glencars-bottom-line","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/sections\/long-reads\/interviews\/how-small-projects-grew-glencars-bottom-line-04-03-2025\/","title":{"rendered":"How small projects grew Glencar\u2019s bottom line"},"content":{"rendered":"

Its founders may be used to winning \u00a3100m-plus projects, but Glencar\u2019s swift rise is down to jobs worth less than \u00a310m<\/strong><\/em><\/p>\n

Glencar\u2019s latest annual results, released in January, revealed higher pre-tax profit from stable turnover for the year to 30 September 2024. The industrial and logistics contractor saw its profit rise from \u00a33.4m to \u00a34.7m, with turnover falling by \u00a3300,000 to \u00a3400.3m.<\/p>\n

Turnover soared from \u00a3160.4m in 2021 to \u00a3417.8m the following year. It fell to \u00a3400.6m in 2023 \u2013 still enough for 53rd place in the latest CN100 list of top UK contractors. Pre-tax profit increased from just \u00a3800,000 in 2022 to \u00a33.4m in 2023 before this year\u2019s rise.<\/p>\n

Sub-\u00a310m jobs are a key part of the firm\u2019s strategy. \u201cI saw an opportunity there,\u201d Glencar chief executive Eddie McGillycuddy tells Construction News<\/em> in an interview at the firm\u2019s headquarters in St Albans, Hertfordshire. As the industrial sector swelled in the mid-2010s, there was an unspoken rule at his former firm McLaren, and other contractors, to leave the smaller jobs behind.<\/p>\n

\u201cMcLaren migrated away from the smaller-end industrial logistics schemes,\u201d says McGillycuddy. \u201cIt never quite said \u2018nothing less than \u00a310m\u2019, but in our eyes, that was the rule.\u201d<\/p>\n

He left the firm in 2016 to form Glencar with McLaren colleague Chris Gleave. McGillycuddy says they were \u201cproactive\u201d and proved they could \u201cdeliver well, and
\nget repeat business in that sort of [sub-\u00a310m] environment\u201d.<\/p>\n

The firm attributes its rising profit to a more selective approach to winning work \u2013 \u201ctrying to price less, but price it better\u201d, as finance director Tom Tutty puts it.<\/p>\n

Cutting its teeth<\/h3>\n

As well as providing the foundations for Glencar\u2019s rapid growth, smaller jobs are an opportunity for apprentices to cut their teeth, McGillycuddy adds. \u201cThey\u2019re a fantastic breeding ground,\u201d he says, adding that while site managers are keen to run their own jobs, throwing them into a project worth \u00a330m or \u00a340m is a big ask.<\/p>\n

\u201cGive them a \u00a35m job,\u201d he says. \u201cIt\u2019s the same principles \u2013 design, project quality, team managing, stakeholders, clients and consultants \u2013 albeit the risk profile is a lot less. Everyone makes mistakes. It\u2019s better to make those mistakes on a smaller scale rather than a grand scale.\u201d<\/p>\n

That is particularly important as the construction workforce continues to shrink, he notes. Last May, the Construction Industry Training Board warned that the sector will need a quarter of a million new workers to fill the gaps by 2028.<\/p>\n

Although industrial projects continue to deliver big for Glencar, the sector has also claimed sizeable scalps, with Buckingham Group and Readie Construction going under in September 2023 and February 2024 respectively. Gleave acknowledges that the impact on its shared supply chains has been Glencar\u2019s \u201cmain hurdle\u201d.<\/p>\n

However, he says Glencar stepped in to help the subcontractors it had in common with the two firms, particularly those it shared with Readie.<\/p>\n

\u201cIf there were firms \u2013 and there were a couple \u2013 that needed a bit of assistance in the hour of need for them to be able to trade through some of the damage\u2026 then we helped them out [by paying early].\u201d<\/p>\n

Natural growth areas<\/h3>\n

Glencar\u2019s growth spurt occurred while much of the sector was struggling with the impact of Covid. Social distancing rules shut sites down for at least a few months, particularly in cities.<\/p>\n

The firm\u2019s decision to focus on jobs outside the inner city meant it was easier to come back to site. \u201cWe were fortunate\u201d, Gleave admits.<\/p>\n

But he says Glencar is now looking at inner-city jobs as one of its \u201cnatural growth areas\u201d, particularly in the industrial and logistics sector, and commercial cut-and-carve jobs in London.<\/p>\n

Other areas for potential diversification include warehouses and ambient stores for the e-commerce sectors, along with student accommodation.<\/p>\n

Headwinds<\/h3>\n

Glencar still faces issues that are common to many contractors. Gleave mentions how schemes can be held up at the planning or client financing stage. \u201cThe gestation period between being told we\u2019ve been successful on a tender and actually getting onto site has been increasing,\u201d says Tutty.<\/p>\n

Its profit margins are thin at 0.9 per cent in 2023 and 1.2 per cent last year, below the CN100 average of 2 per cent. \u201cThat is definitely still lower than we wanted to be,\u201d says Tutty. \u201cI think the realistic ambition would be to double or triple that.\u201d<\/p>\n

The contractor operates in the life sciences and data centre markets, which deliver relatively higher margins than logistics and warehousing. But this comes with higher risk, Tutty says. \u201cWe don\u2019t want to put all our eggs in one basket. We\u2019re not going to take on five data centres at once because of the amount of work it takes to deliver them. Those margins would be eroded very, very quickly.\u201d<\/p>\n

Almost nine years after it was set up in a co-working space in London, Glencar has seven main offices across England and Ireland. There are no bank loans to pay back, and McGillycuddy boasts of a \u00a3350m order book for the current financial year. Turnover should increase by around 10 per cent in the year to September 2025, Gleave says.<\/p>\n

Glencar will remain ambitious, he adds: \u201cThere is nothing broken, so there is nothing to fix.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Its founders may be used to winning \u00a3100m-plus projects, but Glencar\u2019s swift rise is down to jobs worth less than \u00a310m Glencar\u2019s latest annual results, released in January, revealed higher pre-tax profit from stable turnover for the year to 30 September 2024. The industrial and logistics contractor saw its profit rise from \u00a33.4m to \u00a34.7m, …<\/p>\n","protected":false},"author":90643,"featured_media":515220,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[552,570,559],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n