Last updated 14 February 2023
Higgins Group Plc
Higgins Group Plc is a privately-owned construction group with activities spanning private residential development and contracting work, predominantly for registered social landlords and in the education sector. Founded in 1961 by Derek Higgins, the group is based at Loughton in Essex and operates around London and the Home Counties. Although a Plc, Higgins remains a family business and employs more than 230 people on turnover of around £210 million a year.
Financials
After a fall in the previous year, revenue in the 12 months to July 2022 rebounded strongly by 39% to £210.3 million (2021: £151.1 million (2020: £168.3 million) but the group slumped into the red again. At an operating level, Higgins recorded a loss of £4.5 million (2021: £0.9 million profit). Before tax, the deficit was even larger at £5.4 million (2021: £0.2 million profit).
To view the financials for Higgins Group Plc, visit Companies House and use Company ID 02348986.
Operations
Higgins operated separate core for construction and housebuilding, but in 2020 after a disappointing run of performances at the construction division both businesses were combined into a new business, Higgins Partnerships.
This newly combined business incorporates all existing operations, which work mainly on social housing and education work for local authorities, including the London boroughs of Harrow, Southwark and Barking & Dagenham, and registered social landlords (RSLs) such as A2 Dominion, Anchor Hanover, Catalyst and Clarion.
Higgins is working on a number of major projects including the £110 million Botanical Place retirement development in West Byfleet (Project ID: 21051966) and the £75 million first phase of the redevelopment of Hayes town centre (Project ID: 21573481). The group is also on a number of long-term major agreements, mainly on housing projects for RSLs and local authorities, from Notting Hill Genesis’ £250 million Contractor Framework for Development Programme (Project ID: 21419547) to the £1 billion LHC New Build Housing Framework (Project ID: 21316240).
Bassett Business Units
Bassett Business Units is a business centre on the edge of North Weald airfield and near to the M11 and M25 and London Stansted Airport. The centre is comprised of office and light industrial units from 250 sq ft to 500 sq ft.
Glenigan Data
In the 2022 calendar year, Higgins won contracts worth a total of £451.1 million (2021: £68.5 million) and the group was ranked in 28th position in Glenigan’s ranking of the industry’s Top 100 contractors.
In 2022, the group did not submit any detailed planning applications to build private-for-sale housing units (2021: 0 units).
Conclusion: Challenges ahead
Despite turnover slumping due to the pandemic, Higgins had at least traded in the black as a restructure ordered in the wake of a poor performance back in 2019 showed the strengths of the group.
The consolidation of the housing and construction businesses into a sole operation, Higgins Partnership, had been paying off until new building regulations introduced in the wake of the Grenfell scandal have resulted in a provision of £4.75 million to cover remedial works across a number of sites and the group slumped into the red.
In 2020, project delays due to the pandemic hit turnover, particularly from contracting but revenue from this stream has bounced back strongly as the group took on a number of major schemes, which has pushed the order book up significantly over the past year.
Higgins had been ranked in Glenigan’s ranking of the UK’s top 100 contractors until 2016, but subsequently fell out of this ranking and Glenigan’s research did not identify any significant level of orders in 2018. The group has subsequently returned on the back of major projects such as Botanical Place, which has in turn increased the risk profile as larger developments typically carry more risk,. In 2022, the average contract award was valued by Glenigan doubled to £34.7 million (2021: £17.1 million).
Contracting revenue boomed to £190.6 million (2021: £110.1 million) but income from private housing sales has consistently weakened as Help to Buy has ended and fell again in 2022 to £19.6 million (2021: £41.0 million). Completions slumped to just 48 units (2021: 61 units) across two sites but this operation remains highly profitable with pre-tax profits of £2.6 million (2021: £1.6 million).
Glenigan’s data continues to show a lull in planning activity. As oven-ready land bought with planning permission typically costs more, this is unlikely to benefit profit margins but work will begin in late 2023 and early 2024 on three sites for 285 units.
Job cuts contributed to the earlier period of trading in the black with the workforce cut by 12% in 2021 but the average number of employees increased to 318 in the latest year (2021: 230 people), which pushed the wage bill up to £21.6 million (2021: £18.9). As a result, cash at the bank and in hand slipped back to £30.4 million (2021: £37.5 million) and net assets dropped to £46.1 million (2021: £48.6 million).
At an underlying level the group remains profitable, but a reliance on lower margin contracting is likely to increase the need for higher margin housing sales, which in the short term may be more problematic given the wider economic problems.
Winning Work With Higgins Group Plc
Higgins Construction is a member of the Considerate Constructors scheme and operates a responsible sourcing policy for materials. The group operates an approved supply chain database for roles ranging from architecture and engineering consultants, to subcontractors, and material suppliers. Higgins does encourage medium/large enterprises and sub-contractors from the boroughs that Higgins works to ‘be involved in the regeneration of their area.’
Higgins uses events to meet suppliers, such as the Constructionline London Showcase.
The group has developed a corporate social responsibility policy focused on six key areas: environment; health & safety; people development and training; community involvement; customers & supply chain; and social responsibility. Details on Higgins Partnerships’ supply chain can be found here.
Key Higgins procurement contacts include:
Senior materials buyer – Kevin Wood, tel: 020-8508-5555
Kevin.wood@higginsconstruction.co.uk
Senior buyer – John Henry, tel: 020-8508-5555
John.Henry@higginsconstruction.co.uk
Contracts manager – Mark Collier, tel: 020-8508-5555
Mark.collier@higginsconstruction.co.uk