Last updated 15 February 2021
J Murphy & Sons
J Murphy & Sons is a significant player in the London infrastructure markets and one of the UK’s largest privately-owned contractors. The firm’s core markets include rail, station upgrades, water & wastewater, power, tunnels, highways & streetworks, building & property development, utility connections on gas, electrical & water, piling, pipeline testing services and special geotechnical services.
Headquartered in north London, the family-owned company has regional offices in Cannock covering the Midlands and South West, Warrington, Leeds, Sheffield, Ireland and Paisley in Scotland and also works in Canada. The group employs 3,600 people and turns over nearly £900 million a year.
Financials
After a fall in 2016, turnover at Murphy rebounded and continues to rise but problems on legacy contracts in Canada, northern England and Scotland took their toll and in 2018 the group slumped into the red.
In the 2019 calendar year, turnover increased to £880.2 million (2018: £779.5 million) and Murphy returned to profitability, making an operating profit of £1.1 million (2018: £26.7 million loss). At a pre-tax levels, Murphy returned to profit of £7.0 million (2018: £12.9 million loss).
To see the financials for J Murphy & Sons Ltd, visit Companies House and use Company ID 00492042.
Operations
Process Energy Pipelines
Founded in 1965 to focus on the oil, gas and water sectors, Murphy Process Energy Pipelines is a leader in the design and construction of major cross country and urban pipelines, AGI’s and compression stations.
Rail, Railways, Station Upgrades
The group has a longstanding client list that includes Crossrail, Network Rail, London Underground, Eurotunnel CTRL and various train operating companies. The firm operates under a principle contractors’ licence and its multi-skilled workforce works across the sector. Murphy has an emergency call-out service to handle temporary repairs nationally and operates on a number of major long-term framework agreements including Network Rail’s £80 million CP5 Central Workbank Infrastructure programme (Project ID 13204181).
Water & Wastewater
Murphy has wide experience dealing with treatment plants, lagoons, reservoirs, pumping station, tunnelling, wastewater networks and water main construction and renovation. KMI Plus, a joint venture of Kier, Murphy, Interserve and Mouchel, provides solutions to United Utilities. Murphy also works for Wessex Water and Thames Water and is on the latter’s £1 billion AMP7-8 programme (Project ID 19219218).
Power
The group has wide experience in electricity services, providing a one-stop shop in the management, design, installation and maintenance of electrical HV/LV solutions in transmission and distribution. Murphy worked for EDF Energy, CE Electric and National Grid and on tunnels for the Olympic Park.
Tunnels
As a leading tunnelling and underground construction specialist, Murphy works on below and above ground projects and has a wide range of tunnelling technology. The group was involved in the Power Lines Underground (PLUG) Project, for the Olympic Park preparation. Murphy worked on major tunnels for Transco and EDF Energy and is also working with Hochtief on the London Power Tunnels projects for National Grid.
Highways & Streetworks
Murphy has continuing relationships with the City of Westminster and the Royal Borough of Kensington and Chelsea and operates wide-ranging streetworks management contracts. The group is also involved in bridge reconstruction and new bridges and highways infrastructure and working with Carey on the £235 million Oxford Street District Place Shaping Project for Westminster Council (Project ID: 18341481).
Building & Property Development
The group’s building and property development arm works across the commercial, residential, educational, medical, industrial, retail sectors and on refurbishment projects. It works for a range of public and private sector clients either under a traditional contract, on a `design and build` basis or as works packages on major schemes. Murphy is one of 22 contractors on Catalyst Housing’s £900 million social housing framework. Murphy Homes also designs, develops and manages property developments on behalf of clients as main contractor, joint partner or co-developer. The group also provides unified utility connection solutions for construction projects of all sizes, including housing and commercial developments. Other specialist businesses include a piling company, J M Piling Co., Pipeline Testing Services and a specialist geotechnical business.
Glenigan Data
In the 2020 calendar year, Murphy’s order book totalled £544.7 million according to Glenigan (2019: £411.2 million), but this total excludes framework agreements and specialist contracting work. In Glenigan’s ranking of the industry’s top 100 contractors for 2020, Murphy was placed in 14th position (2019: 9th place).
Glenigan’s research shows no sign of planning activity at Murphy Homes in 2020,
Conclusion: Big plans to fall short?
Not so long ago, Murphy had a existing 10-year plan of growing turnover to £2 billion by 2025. The group remains on strong position, but that target now seems unlikely.
In 2019, Net assets fell to £166.0 million (2018: £184.9 million) but net cash strengthened to £71.1 million (2018: £63.3 million) and the group drew down £30 million in banking facilities as the pandemic began to paralyse the economy in April 2020.
The group also cut costs and the workforce was cut by 9% in 2019, reducing the average number of employees to 3,647 people (2018: 3,989 people) through cuts in the administration department. The risk profile has also been reduced and the average contract awarded in 2020 was £17.6 million (2019: £20.6 million).
Glenigan’s research shows orders rising 32% in 2020 and prospects for investment in UK construction as the economy recovers from the worst of the pandemic remain strong. The UK market continues to drive revenue with turnover in 2019 rising to £757.6 million (2018: £668.8 million).
Work overseas contracted as a consequence of a decision in 2017 to offload a 50% stake in Australian business Murphy Pipe & Civil (MPC), which lost money in 2016 after a failed entry into the USA. The USA business was subsequently closed and the proceeds of the sale of Murphy’s 50% stake in MPC to venture capitalists Viburnum will be used to boost growth.
This looks highly unlikely but in 2019 revenue from the rest of the world increased to £117.8 million (2018: £71.1 million) due to a strong performance from Canadian joint venture Surerus Murphy.
At the current level of under £900 million with six years to go of the management’s plan, that would entail rapid expansion but the group envisages consolidation producing an environment with five major contractors turning over £5 billion a year. That scenario began to materialise in early 2018, when Carillion went bust and Murphy was able to swoop and acquire the failed contractor’s power framework business. This brought 22 staff and lucrative long-term work with an existing customer in National Grid on its transmission network, which is worth hundreds of millions of pounds in the long term.
With the company’s management back under family control, the group should benefit from stability and strong prospects from the infrastructure sector but the 2025 target looks unrealistic for now.
How to win work with Murphy Group
Murphy puts a premium on high quality and on delivering projects and services on time and as specified with zero defects. Its workforce is supported by an Integrated Management System (IMS), which aims to ensure that all work is done in a planned, methodical, efficient and transparent way and is certified to ISO 9001:2008.
All its key processes, from tendering to award of contract, design management, environmental, health & safety, commercial management, project execution, handover and maintenance, fall within the management system.
A group quality policy and group BS EN ISO 9001 2008 is available from its website. Details on Murphy’s supply chain can be found here.
Key Murphy Group Procurement Contacts include:
Head of procurement – Jason Chadwick
jasonchadwick@murphygroup.co.uk
Tel: 020-7267-4366