Activity type factsheet 2024/25: Construction
Published 18 March 2024
Construction
Under the Defence Reform Act 2014, the SSRO must provide the Secretary of State with its assessment of the appropriate rates used to determine the contract profit rate for pricing qualifying defence contracts and qualifying sub-contracts. Part of the methodology is the categorisation of comparator companies into five activity types.
- Develop and Make
- Provide and Maintain
- Ancillary Services
- Construction
- Information Technology Services
The results of these groups are separately analysed and this fact sheet describes the Construction group results.
The baseline profit rate combines results from “Develop and Make” and “Provide and Maintain”, as set out in the Recommendation Factsheet. For further information on the methodology used to calculate these rates please see the Single source baseline profit rate and capital servicing rates methodology.
Construction
Companies undertaking comparable activities considered as ‘construction’ are expected to deliver services in relation to the construction of buildings or other structures at fixed locations. Companies could provide such services either on a contract basis with designs and specifications received or using their own designs. Comparable companies may be responsible for the management of the construction project, and are likely to bear contract risk, procurement risk, staff risk and some quality control risk in respect of these activities. They are not expected to bear any significant property price risk in respect of these activities.
Profit on cost of production
2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 | |
---|---|---|---|---|---|
Underlying rate (unadjusted for capital servicing) | 3.34% | 3.18% | 4.03% | 4.54% | 3.68% |
Capital servicing adjustment | -0.27% | -0.17% | -0.29% | -0.30% | -0.18% |
Underlying rate | 3.07% | 3.01% | 3.74% | 4.24% | 3.50% |
Rolling average* | 3.35% | 3.19% | 3.33% | 3.44% | 3.58% |
Note: The capital servicing adjustment accounts, at an aggregate level, for different levels of capital employed across the companies in the index and so sets a baseline upon which step 6 of the contract profit rate applies.
‘*’ A four-year average was used for 2022/23; a three-year average for pre-2022/23 and a three-year average (excluding 2022/23 underlying rate) for 2023/24 and 2024/25.
The pre-2020/21 underlying rates used for the three-year average were:2018/19: 3.49% and 2019/20: 3.50%
Data sources
For further information on the data selection approach please see section 7 of the Single Source baseline profit rate, capital servicing rates and funding adjustment methodology. A company update search of the Orbis database was carried out on 1 November 2023 on data update number 342001 using software version 342. The financial data for the calculation was extracted from Orbis at the same time.
Median capital servicing adjusted return on cost of production
Proportion of Companies by country
Proportion of companies with defence keyword
Supplementary statistics
Number of companies | 91 |
of which profit making | 79 |
Aggregate turnover (£billions) | £155 |
Total capital employed (CE) (£billions) | £4.0 |
Average company CP:CE ratio | 36.02 |
Source: Orbis (Cash figures shown in rounded GBP Billions)
Names of companies in the index
3B Construction LTD |
ADF Group INC |
Aecon Group INC |
AF Gruppen ASA |
Ashe Group Holdings Limited |
B&G Armatures |
Balfour Beatty PLC |
Bermar Building Company Limited |
Billington Holdings PLC |
Bird Construction Inc. |
Bowmer and Kirkland Limited |
Bravida Holding AB |
Bridgetown Holdings Limited |
Byggpartner I Dalarna Holding AB * |
Chap (Holdings) Limited |
Chrysalis |
Cobelba - Sociedade de Construcao Civil, S.A. |
Compania Levantina de Edificacion Y Obras Publicas S.A. |
Conlon Holdings Limited |
Consti OYJ |
Dobloug Holding AS * |
Duro Felguera SA * |
E. M. Pekkinen Oy |
Ecosoer Holding AS |
Edimarante - Sociedade de Construcoes, S.A. |
Elektro AS |
Emcor Group INC |
Emery Brothers Limited |
EW Beard (Holdings) Limited (J) |
Feltham Group Limited |
Fordy Thompson (Holdings) Limited |
Foundation Piling (Holdings) Limited * |
Galliford TRY Holdings PLC |
GHI Contracts Holdings Limited |
Glasgiven Contracts Limited |
Groupe 1000 |
Grupo Empresarial SAN Jose S.A. |
Haandverkskompaniet AS |
Haley Securities Limited |
Hardwicke Investments Limited * |
Highgrove Group PLC * |
Implenia AG |
Jackson, Jackson & Sons Limited |
John Weaver (Holdings) Limited |
K 21 Entreprenad AB |
Kaj Ove Madsen A/S Aarhus |
Kier Group PLC |
Knox & Wells Holdings Limited |
Koninklijke BAM Groep NV |
Lareco Infra |
Lindum Group Limited |
Lonsdale Holdings Limited * |
M R Stephenson Limited |
M.P.B. Structures LTD |
Mace Finance Limited (J) |
Martifer Sgps S.A. |
Mitchellson Formwork & Civil Engineering Limited |
Morgan Sindall Group PLC |
Northern Bear PLC |
Nouveaux Batisseurs Associes |
O.T. SRL |
OBM Construction * |
Ohob Holdings Limited |
Oliver Connell and SON Limited |
Peab AB |
Porr AG |
Putkiwuorio Oy |
Rakennusliike J. Malm Oy * |
Rakennuspetaja Oy |
Renelec Group Limited |
Saarco AS |
Simpson (York) Holdings Limited |
Skanska AB |
Sorgem Societe D Economie Mixte du VAL D Orge * |
stahl + verbundbau gesellschaft fuer industrielles bauen m.b.H. |
Steve Hoskin Construction Limited |
Strabag SE |
Subsea 7 SA |
Tclarke PLC |
THE Castle Building Services Organisation Limited |
TOR Entreprenoer AS |
Tutor Perini Corporation * |
VAN Huele |
Varden Gruppen AS |
Veidekke ASA |
Vinci |
Wates Group Limited |
Westcliffe Holdings Limited |
William Hare Group Limited * |
Winvic Group Limited |
WYN Construction Limited |
‘*’ Indicates that the company is a loss-maker in the year.
(J) Indicates a company which was not in the activity group last year, but has been added this year.