Guidance

Construction factsheet 2025

Published 14 March 2025

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 four activity types.

• Develop, Make and Support[1]
• Ancillary Services
• Construction
• Information Technology Services

The results of these groups are separately analysed and this factsheet describes the Construction group results.

For further information on the methodology used to calculate these rates please see the Single Source baseline profit rate and capital servicing rates methodology.

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[1] The ‘Develop, Make and Support’ activity type replaces the previous activity types of ‘Develop and Make’ and ‘Provide and Maintain’. Further information can be found in the published Q&A document.

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

	2021/22	2022/23	2023/24	2024/25	2025/26
Underlying rate (unadjusted for capital servicing)	3.18%	4.03%	4.54%	3.68%	3.67%
Capital servicing adjustment	-0.17%	-0.29%	-0.30%	-0.18%	-0.36%
Underlying rate	3.01%	3.74%	4.24%	3.50%	3.31%
Rolling average[2]	3.19%	3.33%	3.44%	3.58%	3.68%

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 4 of the contract profit rate applies.

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[2] 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 onwards. The pre-2021/22 underlying rates used for the three-year average were: 2019/2020: 3.50% and 2020/21: 3.07%.

Data sources

For further information on the data selection approach please see section 7 of the Single Source baseline profit rate and capital servicing rates methodology. A company update search of the Orbis database was carried out on 1 November 2024 on data update number 354001 using software version 354. 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	77
of which profit making	68
Aggregate turnover (£billions)	210
Total capital employed (CE) (£billions)	7
Average company CP:CE ratio	29.57

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
Balfour Beatty PLC
Bermar Building Company Limited
Billington Holdings PLC
Bird Construction Inc.
Bouygues  (J)
Bowmer and Kirkland Limited
Bravida Holding AB
Bridgetown Holdings Limited
Byggpartner I
Dalarna Holding AB *
Chrysalis *
Cobelba - Sociedade de Construcao Civil, S.A.
Conlon Holdings Limited
Consti OYJ
Dobloug Holding AS
Ecosoer Holding AS
Edimarante - Sociedade de Construcoes, S.A.
Elektro AS
Emcor Group INC
EW Beard (Holdings) Limited
Feltham Group Limited
Fordy Thompson (Holdings) Limited
Foundation Piling (Holdings) Limited
Galliford TRY Holdings PLC
Groupe 1000
Grupo Empresarial SAN Jose S.A.
Haandverkskompaniet AS
Haley Securities Limited
Hardwicke Investments Limited *
Harper Group Management Limited
Highgrove Group PLC *
Implenia AG
John Weaver (Holdings) Limited
K 21 Entreprenad AB
Kier Group PLC
Lareco Infra
LES Macons Parisiens
Lindum Group Limited
M R Stephenson Limited
M.P.B. Structures LTD
Mace Finance Limited
Martifer Sgps S.A.
Mitchellson Formwork & Civil Engineering Limited *
Morgan Sindall Group PLC
NG Bailey Group Limited  (J)
Northern Bear PLC
Nouveaux Batisseurs Associes
Ohob Holdings Limited
Oliver Connell and SON Limited
Peab AB
Porr AG
Putkiwuorio Oy
Rakennusliike J. Malm Oy
Rakennuspetaja Oy
Renelec Group Limited
Royal BAM Group NV
Simpson (York) Holdings Limited
Skanska AB
Sorgem Societe D Economie Mixte du VAL D Orge *
stahl + verbundbau gesellschaft fuer industrielles bauen m.b.H.
Strabag SE
Subsea 7 SA *
Tclarke PLC
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.