Tide Construction has reported a fall in pre-tax profit despite an 11 per cent jump in revenue.
The London-based company, which specialises in building high-density residential schemes using modular methods, has reported a pre-tax profit of £7.1m for the year ending 31 August 2023 – down from £11.1m a year earlier.
This is despite its revenue growing from £177.5m to £197.2m. The company’s pre-tax profit margin was therefore squeezed from 6.25 to 3.6 per cent.
In a strategic report accompanying the accounts, company directors said they were “pleased with revenue growth” but added: “Continuing price inflation in materials and subcontractor costs reduced margins in our contracting operations.”
They said that “project management work helped to reduce the overall impact of price inflation on our core business”, adding that they “remain focused on strengthening the business by embracing the revolution taking place in offsite construction”.
The company completed its College Road development in Croydon, south London, during the last quarter of 2023 after a 28-month construction programme. At 163 metres, the scheme is Europe’s tallest volumetric project, featuring towers standing at 35 and 50 storeys.
In February the company announced it would also be developer and builder on a 32-storey residential scheme in Acton, west London, while in March CN published a deep-dive on the contractor’s work in Walthamstow, where it is delivering towers standing at 34 and 27 storeys.
During its last financial year, Tide saw its average number of staff creep up from 38 to 40, according to its latest accounts. It reported net assets of £57.4m at year-end, including £10.4m of cash or cash equivalents.
Christy Hayes, chief executive of Tide, said: “We are pleased that Tide has had another consecutive year of profit, revenue growth and delivery. As with the wider construction industry, and in line with our assumptions, we have experienced continued price inflation.
“Looking ahead, our volumetric model offers the UK a great opportunity to decarbonise and enhance deliverability in the real estate industry. We have the capacity to easily deliver thousands of homes annually, which we will continue to work towards alongside new and existing partners.”
The company paid a £23m dividend at the end of the financial year. The company is ultimately controlled by Ireland-based John Fleming and Michelle Fleming.
According to its website, Tide has delivered £3.5bn of real estate, installed more than 20,000 volumetric units and created over 10,000 student bedrooms. Tide said it started work on more than 3,500 new homes in 2023.
