Last updated 28 April 2023
Lorne Stewart Plc
Lorne Stewart is one of the UK’s top five mechanical and electrical (M&E) and services contractors with a 100-year history and a blue chip client list. Based in Harrow, the group operates from a network of 14 offices across the UK and after a restructuring, operates three main divisions: contracting, modular design and services. The group turns over more than £140 million a year and employs in excess of 500 people.
Financials
After a fall in the previous year, turnover in the year to December 2022 rebounded to £149.3 million (2021: £117.7 million) and the group remained in the black. At an operating level, a profit of £0.8 million was returned (2021: £0.6 million). Before tax, Lorne Stewart made a profit of £0.3 million (2020: £0.3 million).
To view the financials for Lorne Stewart Plc, visit Companies House and use Company ID 01348218.
Operations
Lorne Stewart has 13 offices including its headquarters in Harrow and four key operating divisions.
Engineering
The contracting division manages, designs, procures and installs a wide range of M&E services across a range of sectors including: healthcare, education, custodial, defence, commercial, leisure, retail and residential and also offers expertise in data installation and plant hire.
The firm has a strong track record on projects of all sizes up to £50 million and offices in Birmingham, Cardiff, Bristol, Harrow, Gloucester, Greenford, Leigh, Neyland, Plymouth, Redruth, Southampton and Wynard. Clients range from the universities of Manchester and Sheffield to housebuilders such as Berkeley and Keepmoat to NHS trusts and local authorities such as Carmarthenshire County Council.
Facilities Services
The group’s services division is involved in managing and caring for a wide range of buildings across business and industry and has offices in Bristol, Greenford, Leigh and Plymouth. This division provides a wide range of building services, including: air conditioning, heating, plumbing, boiler equipment, electrical, UPS, steam systems, data cabling, ventilation, refrigeration, controls (electric / pneumatic) and lighting/floodlighting.
Lorne Stewart has worked for Virgin Trains since 2013 and other major FM clients include Cornwall Council and Torbay & Southern Devon NHS Trust. Lorne Stewart also offers a range of specialist services including off-site manufacture, intelligent building innovation and an Information Management System.
Rotary
In August 2012, Lorne Stewart acquired four of the regional businesses at failed rival M&E contractor Rotary Group which brought extra workload, a strong market position in the North and a client list which included Rolls-Royce to the Lorne Stewart portfolio. Rotary has offices in Birmingham, Greenford, Leigh and Wynard
Modular Designed Solutions
This division is based in Telford and includes MDSL and works with other parts of Lorne Stewart to design prefabricated projects.
Glenigan Data
Glenigan’s data shows that Lorne Stewart is working on a number of major projects from a £17.6 million primary school in Mid Glamorgan (Project ID: 21492332) to an £85 million extension to the Ablett Unit at Glan Clwyd Hospital in Rhyl (Project ID: 20430239).
The group is also on long-term agreements form a £5 million reactive maintenance & repairs framework for Caerphilly County Borough Council (Project ID: 18033771) to a £31 million minor works framework for Stockton-on-Tees Borough Council (Project ID: 21458256).
Conclusion: Back on the road to recovery
After retreating in 2021, turnover exceeded pre-pandemic levels in the most recent trading year and after trading in the red during the worst of Covid-19, Lorne Stewart was profitable for a second consecutive year.
Operating profits rose by a quarter while growing revenue by 27% and, while margins remain stubbornly low at just over 0.5% (2021: 0.5%), the cash position is improved. Cash at the bank and in hand at the end of December was £14.0 million despite the rise in work (2021: £15.6 million), while shareholders’ funds virtually doubled to £17.7 million (2021: £9.7 million).
Costs have however been trimmed while growing workload. Expenditure on hire of plant and machinery was cut by 26% to £1.4 million (2021: £2.4 million), while the workforce has been cut by 12% to an average of 547 people (2021: 625 people). This reduced the wage bill by 4% to £25.5 million (2021: £26.5 million).
This latest performance hopefully brings to an end a depressing run of results that had started in 2016 when, two directors quit, including Peter Lewis, who had only joined as group executive and strategic director a year earlier from Shepherd and a wider malaise that dates to the acquisitions of Rotary Group and MDSL.
In 2014, Rotary had generated a quarter of Lorne Stewart’s turnover but registered an operating loss of £0.9 million. By 2019, Rotary was still trading in the red, losing £0.8 million at an operating level (2018: £0.6 million profit), despite turnover being reduced to £10.7 million (2018: £14.5 million). In 2021, Rotary’s turnover had dwindled to £3.8 million (2020: £9.5 million) and an operating profit was finally achieved – of £46,000 (2020: £1.4 million loss).
The legacy contracts that had hammered profitability in recent years finally concluded in 2019, only for the pandemic to prolong losses but light now appears at the end of the tunnel. The weakness in the wider economy and the impact of Brexit remain a threat but the management are focusing on work through frameworks, which offers significantly less risk than one-off packages.
The group remains a major player in its sector and appears in better shape to grow again across all measures.
Winning work with Lorne Stewart Plc
Lorne Stewart is certified to ISO 9001 ISO 14001 and OHSAS 18001 and has national accounts aimed at bringing best value to commodity procurement with regional supply chain arrangements bolstered by a third tier specialist supply chain using hand-picked delivery teams. Details on the group’s supply chain can be found here.
Key Procurement contacts at Lorne Stewart include:
Operations director – Nick Smith, tel: 020-8732-2000
Business development director – Simon Ogunby, tel: 020-8732-2000
Simon.ogunby@lornestewart.co.uk
Pre-construction manager – Colin Biggs, tel: 020-8732-2000
Colin.biggs@lornestewart.co.uk
Senior mechanical estimator – Nick Lamb, tel: 020-8732-2000