Higgins expects turnover of £250m

Higgins Group anticipates turnover bouncing higher to £250m this year thanks largely to its push into mixed-tenure developments.

Paul Lewellen, finance director, said: “The £21m Apple Tree Farm contract at Crawley is a good example of what we’re now doing – half the 176 properties there are social housing units being built for Moat Housing Group, while the others are private houses for ourselves, selling through Higgins Homes.”

Higgins’ annual results (12 months to 31 July) show turnover of £210m (£190m) with pre-tax profit strengthening to £10m (£9m).

Higgins operates two divisions: contracting and homes.

Contracting generated an operating profit of £4.8m on a turnover of £130m. It provides social housing for local authorities and RSLs within a 120km radius from its base in Loughton, north-east London.

“A lot of this work is now through frameworks,” said Lewellen. “We have more than 20 of them, and although they have been established, it is still too early to measure the results. It is quite challenging getting yourself into a framework as you need to offer such a lot of evidence to show that you meet with the client’s suitability criteria.

“We ended up making a 4% operating margin and that’s satisfactory.”

Higgins Homes, the private housing division, made a £9.8m operating profit on a turnover of £80m. Modern methods of construction – such as wood frame, steel frame and grey water recycling – are used on 50% of properties

Higgins continues to shame its construction rivals by paying creditors in an average of 21 days.

“It helps our supply chain management,” said Lewellen. “We simply agree terms with the subcontractors working for us, and then adhere to them.”

[Contract Journal, 8 November 2006, p 8]