Monday, June 17, 2024

Direct delivery model pays off as Murphy profit soars to £67m

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As the wider industry battled with supply chain challenges, Murphy’s marked improvement in performance saw operating margins jump from 3% to 5%.

Group revenue marginally declined 5% to £1.42bn in 2023, primarily due to the timing and completion of projects in Canada, although this was offset by continued revenue growth in both Ireland and the UK.

Staff headcount rose over the year by 4.5% to 3,855, as Murphy continued to invest and develop talent.

The latest 2023 results, which saw operating profit hit £72m, complete a dramatic turnaround in profitability in recent years following losses of £27m back in 2018.

Murphy trading over six years
2023 2022 2021 2020 2019 2018
Op. profit £72m £46m £22m £13m £1m -£27m
Revenue £1.42bn £1.49bn £1.27bn £1.12bn £880m £780m
Margin 5% 3% 1.7% 0.1% 0.1% N/A

Alongside a strong balance sheet, Murphy saw net cash increase to £347m.

John Murphy, chief executive officer of Murphy, said the group now expected to benefit from a continued focus on its three geographies of the UK, Ireland and North America, as demand grew in its strategic sectors of transportation, natural resources, power and water.

He said: “We remain committed to our self-delivery operating model, we believe this is a competitive differentiator and offers our customers a high level of confidence and assurance on safe, timely and quality project delivery within the sectors we operate in.

“We continue to maintain a balanced portfolio across our core sectors and geographies and we aim to grow our market share in the emerging energy security and net zero opportunities.

“I am also pleased to report our selective tendering activity has resulted in another strong order book, which has increased by 31% from 2022 to over £3.3bn in 2023.”

Murphy said that there was a particularly positive outlook for UK construction in 2024.

Regardless of the short-term hiatus caused by the forthcoming General Election, Murphy said it expected to see multiple opportunities in the years ahead from the Government’s £700bn National Infrastructure and Construction Pipeline over the next 10 years, with requirements for transport, energy and water investment.

Investment-linked to the wider energy transition and to support energy security would also provide significant opportunities for the business globally with the wider adoption of renewable energy sources as part of the shift towards more sustainable energy solutions gathering pace.

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