Last updated 4th December 2020
NMCN plc went into administration in October 2021
NMCN plc
nmcn (formerly North Midland Construction) was founded in 1946 as a partnership between William Morris and Major Terence Moyle and, having listed on the stock exchange in 1970, the group remains one of the few remaining quoted medium-sized contracting businesses.
Based in Notts, nmcn turns over around £400 million a year and operates through two main divisions, water (working for ten of the national water companies) and built environment (building, highways and telecoms) and with 10 regional offices. In late summer 2020, the group had an order book worth £350 million and said all of its sites were fully active and working.
However in September 2020 group chief executive John Homer resigned and in October 2020 the group said that after a review of its major contracts it expected to report a pre-tax loss of £13.5-15 million for the full year. The problem contracts involved were mainly in the water sector although the situation is likely to have limited impact on the group”s cash position. His departure followed the resignation of chief financial officer Daniel Taylor in July. Alan Foster joins as a director and chief financial officer in early 2021 from National Grid.
However the group is starting see volumes recover from the water industry as it moves from AMP6 to AMP7 and its construction business has also seen some recovery after being affected by Covid issues which were delaying the start of some highways projects. Telecoms activity remains strong.
In October 2020, acting chairman Ian Elliott said activity levels and sales inquiries were “encouraging”. He said: “The combination of the coronavirus impact and the company”s internal issues is challenging, but the board remains confident of the market opportunity and the group”s ability to successfully address it.”
Financials
To view the financials for North Midland Construction Plc, visit Companies House and use Company ID 00425188.
nmcn reported a pre-tax profit £7.44 million in the year to December 2019 compared with a restated £6.0 million previously. Turnover rose by 19% to £404.7 million, up from a restated £340.4 million and the group had a year-end cash balance of over £25 million. However Covid took its toll on the group”s results in the half year to June 2020; nmcn reported a pre-tax profit of £809,000, down from £3.5 million previously on a little-changed turnover of £181.6 million.
Water
Water is a key market for nmcn and in 2019, the division reported an operating profit of £7.6 million in 2019 on revenues of £282.6 million. Growth has been helped by new framework awards, an increase in infrastructure works and the performance of its AMP6 frameworks in the late stage of the cycle. A focus on full asset lifecycle management has also been successful in the sector.
The firm is involved with various major projects, including a jv infrastructure contract for Severn Trent Water on the Birmingham Resilience Project worth over £100 million over three years. The group”s Elan Valley Aqueduct scheme, for Severn Trent is a key project in the AMP6 programme of works.
Meanwhile, an increased workload in Yorkshire has prompted the firm to open a new larger office in south east Leeds in recent years. Early in 2020, the group”s fabrications department won Yorkshire Water”s permanent access fabrication framework which is worth around £2-3 million a year and runs for five years.
The firm”s water sector offer has also been strengthened recently by the acquisition of Lintott Environmental Technologies and a subsidiary Lintott Control Systems.
NMCN holds Lots 1 and 2 on Severn Trent Water”s AMP7 programme, maintaing a collaborative relationship of over forty years. Meanwhile, the group has won Civil Engineering K7 Capital Works Contract for South West Water and contracts for both Portsmouth and Bristol Water. Other sector clients for the group include United Utilities, South West Water and Yorkshire Water.
Built Environment
Turnover at nmcn”s built environment division rose by 28% to £122.8 million in 2019 and the division returned to the black with an operating profit of £3.04 million, compared to a loss of £69,000 previously and helped by a significant turnaround at its telecoms business. As at late summer 2020, the division had an order book of £142 million, up 20% on a year earlier.
Today, the group”s building business unit has a solid order book and various large potential schemes in the pipeline where it expects orders to materialise in the second half of 2021. Over recent years, the group has secured frameworks for Leicester City Council, Efficiency East Midlands and Pagabo and student accommodation has proved a good market. It has also set up a new power and industrial business unit.
After a difficult first half of 2020, prospects are more encouraging for the firm”s highways business which works on some 15 frameworks. In autumn 2020, Vip Gandhi was appointed as the new MD of the group”s highways unit; he had previously been with consultancy Jacobs. The division has recently started work on junction improvements to the M621 worth £28 million as part of the Regional Development Partnership by Highways England. It is also preferred bidder on various local authority road improvements schemes set to start late in 2020 and add to the division”s 2021 order book.
Meanwhile, nmcn”s telecoms unit won a major contract for Openreach in autumn 2020 to support its £12 billion project to connect millions of homes and business across the UK with full fibre broadband. nmcn will play a key role in building new fibre infrastructure to premises across the East Midlands. nmcn has also been appointed by CityFibre to deliver full-fibre rollouts across Barnsley and Halifax in contracts worth £39.6 million and due to start early in 2021.
During 2020, the unit also secured the Virgin Media Morpheus frameworks in two regions and further works for British Telecom.
Glenigan Data
Glengian data points to a varied and bouyant workload at nmcn. It shows that the firm has recently been appointed as the main contractor on a £30 million student accomodation project in Nottingham, the Traffic Street Project, for Jensco Group where work is set to start in February 2021 and continue for 13 months (Project ID: 20165802). Glenigan data also shows that nmcn has been appointed as the civil contractor on a £5.3 million waste processing facility project in Hull for Geminor UK where work is set to start in early 2021 (Project ID: 19034289). NMCN is also the main contractor on a £30 million scheme of 48 flats and 13 townhouses at Meadown Lane in Nottingham where work is set to start in summer 2021 and continue for 18 months (Project ID: 17421576).
Conclusion: Prospects set to brighten with a solid order book
NMCN is one of a dwindling band of medium sized contractors quoted on the London Stock Exchange which until the latest setback had appeared to working its way through the loss-making contracts taken on in the recession and which have marred its results in recent years. Assuming a new senior team can avoid the problems in the water sector which have left it with losses, the underlying business appears to be in good shape and benefitting from a blue chip client list, a growing workload and a continuing strong position on frameworks, particularly on highways and with the utilities. Telecoms also looks a highly promising sector for the group.
Winning Work With North Midland Construction (nmcn)
nmcn has an Ethical Procurement Policy and is signed up to WRAP’s “Halving Waste to Landfill” initiative. NMC operates the Partners 4 Delivery (P4D) system that is aimed at delivering in six core areas: health and safety excellence; commitment to prompt settlement of accounts; recognising and investing in corporate social responsibility; embracing environmental best practice; providing fair terms and conditions, appropriate to scope of supply; and an alignment with the ethical procurement policy. Details on NMC’s supply chain policies can be found here.
nmcn screens suppliers through a balanced screening process. This includes historical performance plus alignment and commitment to the group’s vision. A supply chain questionnaire analyses these qualities and sets out how nmcn proposes to develop suppliers and contractors to the level of supply chain partners. Meanwhile, nmcn has supply chain forums to discuss key themes such as the road to zero, positive interventions.
Key nmcn procurement contacts include:
Commercial Manager – Gary Catignani
Tel: 01623-515008
Executive Operational Director Building & Civil Engineering – John Kay
Tel: 01623-515008
Pre-construction manager nmcn – Dave Blount
Tel: 01623-515008
Senior Buyer, Building Division – Marc Hall
Tel: 01623-515008