Last updated 29 September 2022
Morris & Spottiswood Ltd
Morris & Spottiswood is a family-owned Scottish construction group that was founded in 1925. The group specialises in fit-out, housing, maintenance and mechanical & electrical work across Scotland and northern England and turns over more than £90 million a year and employs around 200 staff.
Financials
In the 12 months to December 2021, turnover rose to £93.2 million (2020: £72.9 million). Pre-tax profits rose to £1.0 million (2021: £0.7 million). At an operating level profits also increased to £1.1 million (2021: £0.7 million).
To view the financials for Morris & Spottiswood Ltd, visit Companies House and use Company ID SC046129.
Operations
Morris & Spottiswood provides services from project management and main contracting work through to specialist contracting packages, including joinery, flooring and mechanical and electrical works, through to facilities management operations. The company has its head offices in Glasgow and other offices in Edinburgh, Leeds and Warrington.
Morris & Spottiswood has traditional exposure to the residential and local authority sectors and is on a number of long-term agreements. These range from Cumbria County Council’s £5 million capital minor works framework (Project ID: 19245356) to the £400 Procure North West framework (Project ID: 18216502).
The group works for a number of registered social landlords, including Govanhill and Thenue housing associations and is on Places for People’s £250 million new build major and minor works framework (Project ID: 15372953). In the education sector, Morris & Spottiswood works for clients such as the University of Edinburgh and the University of Glasgow, where the group is on a £250,000 capital projects framework (Project ID: 18273779).
Morris & Spottiswood also works in the health sector on long-term projects, and for select private sector clients, such as Rangers Football Club..
In 2015, Morris & Spottiswood set out to grow turnover in northern England to £35 million after acquiring maintenance contractor LLED Construction, which turned over £1.3 million a year. In March 2022, Morris & Spottiswood acquired Livingston Building Services, an M&E contractor from West Lothian, which in 2020 had turnover of £8.8 million and made a pre-tax profit of £929,696.
Glenigan Data
Morris & Spottiswood rarely features in Glenigan’s ranking of the top 100 main contractors due to the nature of the group’s work in facilities management and on smaller contracts that are not eligible for inclusion in these listings.
The focus on local repair and maintenance. In the 12 months to Q2 2022, Glenigan’s research shows that Morris & Spottiswood won work totalling £9.6 million (2021: £2.7 million).
Conclusion: New challenges ahead
The pandemic impacted trading, particularly in the second quarter of 2020 but margins have improved at Morris & Spottiswood as the major cuts made to its cost base benefitted the bottom line. In 2020, the group took a hit of £653,652 in redundancy costs, which reduced the workforce in the latest year by a third to an average of 206 people (2020: 300 people).
The bulk of the cuts were at fit-out, housing, maintenance and mechanical electrical operations, where the workforce was slashed to just 50 people (2020: 113 people), while back office and management staff was cut to 156 people (2020: 187 people). These cuts helped reduce the wage bill by 27% to £11.7 million (2020: £16.1 million) and lift the operating margin to 1.1% (2020: 1.0%).
The education sector continues to bring in opportunities with work for Edinburgh and Strathclyde universities, while local authority work remains a regular workflow for clients such as Midlothian Council and the City of Edinburgh Council and other public bodies including the NHS in Scotland.
There had subsequently been some signs that the group was taking on larger projects outside its traditional usual area, but the group continues to take on low value work and avoid exposure to larger riskier projects. The average contact award in the 12 months to Q2 2021 was valued by Glenigan at £2.4 million (2021: £916,000).
The management have also returned to acquisition to produce growth but have switched strategy to a focus on specialist contracting and its native Scottish market. Previously, Morris Spottiswood sought the customer base in northern England with the LLED acquisition and what the management hoped would be a ‘gateway to the Highlands’ after opening a branch in Perth in 2018. At the end of that year and after a strategic review, the group opted to reduce exposure to national term maintenance contracts which had proved unprofitable and this led to staff cuts in 2018 and 2019.
The group had borrowings at the end of the last financial year of £3.5 million but these remained unutilised. The year-end net cash position slipped to £12.5 million (2020: £13.5 million) and net current assets eased back to £9.4 million (2020: £10.2 million). The group has recovered from the pandemic but faces fresh challenges in terms of increased labour and materials costs and, with jobs cut again but turnover back to 2019 levels, the likelihood is that more staff will be needed to service workload.
Winning Work With Morris & Spottiswood
Morris & Spottiswood is accredited to CHAS and Constructionline and part of the Considerate Constructors scheme. The group ran its first lean management project in 2002/03 looking at annual expenditure of externally hired plant. This used techniques including Pareto analysis, value stream mapping, cause and effect and implementation planning to study existing processes and identify potential improvements. A second lean management project was started in 2003/04 and covered procurement.
The success of these two lean management projects resulted in the group creating centralised procurement functions from its offices in Glasgow and North West England with material supply and plant hire managed by five procurement professionals. Details on the supply chain at Morris & Spottiswood can be found here.
Suppliers interested in working for the group are, in the first instance, asked to contact the group via email at – supplychain@morrisandspottiswood.co.uk
Key Morris & Spottiswood procurement contacts include:
Operations director – Craig Robertson, tel: 0141-425-1133
Craig.Robertson@morrisandspottiswood.co.uk
Procurement business partner – Jennifer Strain, tel: 0141-425-1133
Jennifer.strain@morrisandspottiswood.co.uk
Procurement partner – Joanne Gaughan, tel: 0141-425-1133
Joanne.gaughan@morrisandspottiswood.co.uk