FACT FILE
FINAL19981997
Turnover#383m#307m
Pre-tax profit #20.8m #16.2m
EPS20.27p15.97p
Dividend5.85p5.14p
Morrison Construction, which separated itself from the rest of the industry with a heavy emphasis on non-traditional tendering, is now looking to other industrial sectors for ways of improving its
operations.
The Edinburgh-based company, which announced a 28% rise in year-end pre-tax profits, said yesterday it had reached its goal of securing 80% of work without resorting to lowest-price bidding.
The programme to achieve this was launched in early 1990 and has reached its target almost two years ahead of schedule.
With many construction companies now emulating this model, Morrison is widening its benchmarking efforts to include other industrial sectors such as car
manufacturing.
Explaining the concept,
chairman Fraser Morrison referred to research which compared construction to the automobile industry.
Among other conclusions was the finding that it was feasible to reduce defects in completed construction projects by up to 50%.
''I think (that) is right,'' Morrison said. ''We ought to be able to move in that direction to reduce defect levels. ''Levels of waste is another area worth considering. There are lots of examples in other industries where standards are better than (in construction).''
During the year to March 31, Morrison Construction lifted pre-tax profits to #20.8m, against #16.2m in 1997.
This was above most analysts' expectations, which in turn helped push the group's shares 6.5p higher to 387.5p by the close of trading.
Morrison, which is reportedly the UK industry's uncontested leader in operating margins, pushed turnover 25% higher to #383m. At the same time, overall group margins improved from 5.3% to 5.4%.
The chairman said these figures ''clearly illustrated'' the group's ability to grow sales while maintaining high operating margins.
The company, which doubled the number of its English-based regional operations last year, would now like to further expand its nearly 1% share of the UK
construction market.
''Acquisition remains an option for us in terms of developing the business,'' Morrison said. ''That may well feature as we look forward, although our emphasis in recent years has been on organic growth.
''What we have been doing very successfully is investing cash in projects, turning them around, making a profit and then finding new projects to invest in.''
Recent examples of successful projects include a retail park development at Meadowbank and the Clydesdale Bank office building at Exchange Plaza, both
located in Edinburgh.
The latter was developed on a partnership basis with the CALA group. Morrison's share of sales from such associates and joint ventures rose to #53.5m during the year, compared to #7.3m the previous year.
Although there has been little movement on private finance initiative projects, Morrison said the prospects for the industry and the group were as good as at any time in the 1990s.
''The underlying factors are all there - low interest rates, low inflation, confidence is high and there are lots of millennium projects going on,'' he said.
The group backed up its confidence with a full-year dividend of 5.85p, up 13.8% on the previous year's payment of 5.14p per share.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article