Last updated 5 December 2023
HG Construction
HG Construction was founded in 2000 through a management of the construction division at Hertfordshire-based commercial developer, Hunting Gate, led by current chairman, Chris Benham. The group specialises in design and build work, employs nearly 200 staff and turns over more than £300 million a year.
Financials
In the 12 months to December 2022, turnover leapt to £335.7 million (2021: £242.3 million), but profitability suffered. At an operating level, profits fell to £15.1 million (2021: £24.9 million), while before tax profits dropped to £15.3 million (2021: £24.9 million).
To view the financials for HG Construction Ltd, visit Companies House and use Company ID 1617719.
Operations
The group is based at offices at Hitchin in Hertfordshire and Farringdon in London and has two main operations: HG Construction and a development division, HG Living, which specialises in build-to-rent, student accommodation and residential-led mixed use developments.
HG Construction
The residential sector provides a steady stream of work. In the private sector, HG works for clients including Aitch Group, Healey Development, Pocket Living and Turnstone Estates. Private sector residential schemes taken on by HG Construction include the £50 million Chiswick High Road scheme comprising 133 flats, four town houses and ships in west London for Great Marlborough Estates (Project ID: 14081496).
HG Construction works on housing schemes for local authorities, such as Rushmoor Borough Council, and for a number of major registered social landlords including Southern Housing and Origin Housing, and is on a number of major long term frameworks in this sector. These include Notting Hill Genesis’ £250 million Contractor Framework for Development Programme, which runs until 2026 (Project ID: 21419547) and Octavia Housing’s £300 million Connected Contractors Framework (Project ID: 19367756).
The group also works on student accommodation projects for clients including Alumrose, CA Student Living, McLaren Property, Scape Student Living and Tribe Avonmouth. Major student accommodation schemes taken on by HG Construction include the £173 million redevelopment of the former Hammersmith Magistrates Court in west London for Scape (Project ID: 18410741) and the £109 million Kennington Lane Development in Wandsworth, south London, for DPK (Project ID: 19405323).
In 2023, HG Construction had 26 sites valued at £900 million under development.
HG Living
HG Living is a property development specialist with a track record of creating purpose built student accommodation, build to rent and affordable housing schemes for financial clients. This division has delivered more than 1,000 homes with a gross development value of £250 million.
Schemes developed by HG Living include the £56.4 million Bowback House scheme providing 306 homes in Milton Keynes for the Pension Insurance Corporation (Project ID: 17444369) and the £35 million development of 334 student units in Newcastle-upon-Tyne with Q Investment Partners (Project ID: 15034547).
Glenigan Data
In the 12 months to Q3 2023, HG Construction won work totalling £248.2 million (2022: £344.5 million) and was ranked in 39th position in Glenigan’s ranking of the industry’s top 100 contractors (2022: 35th)
Conclusion: Well placed
When Chris Benham and Ian Sanders bought out Hunting Gate’s construction division in 2008, the then managing director and commercial director took 100% control of a business turning over £50 million. More than two decades later, and HG Construction, where Benham is now chairman, have grown in revenue terms by more than 150% but the inflationary costs that have hit the industry have had an impact.
At Q3 2023, the order book was down by 28% on the same stage a year earlier according to Glenigan’s research, although this reflects wider falls across the industry and HG Construction remains among the industry’s Top 40 contractors in this period in terms of work won.
The focus remains on larger contracts. In the 12 months to Q3 2023, the average contract award was valued by Glenigan at £35.5 million (2022: £34.5 million). In this period, the largest contract won by the group was an £84.2 million deal to build a mixed use development including an Aldi supermarket at Southwark in south London for the German supermarket, PPR Estates and Metropolitan Housing Trust (Project ID: 19164666).
The group has invested in staff to service rising turnover. The average number of employees in 2022 rose 35% to 175 (2021: 130). The bulk of this increase came through recruitment of site staff and by 2023 the group reported that the overall workforce had risen to 300 people. In 2022, the overall wage bill rose by 44% to £14.0 million (2021: £9.7 million).
Gross profit margins halved to 6.5% (2021: 12.3%), but at an operating level margins firmed to 4.6% (2021: 4.5%). Cash at the bank and in hand dropped to £36.4 million (2021: £43.9 million) but the financial year-end capital position, though down, was still strong at £40.0 million (2021: £47.8 million).
By the end of Q2 2023, the management was seeing more stability and expected the year-end order book to pass that achieved in 2022.
The expansion of HG Living, which has a development pipeline of 1,000 units with a gross development value of £280 million, stands the overall group in a good position going forward.
Winning Work With HG Construction
HG Construction is accredited to CHAS and Constructionline, has the ISO 14001 Standard and is working towards Planetmark and also to being carbon net neutral for scope 1 and 2 carbon emissions by 2030. The group’s environmental strategy embraces zero waste, sustainable procurement, carbon reduction and biodiversity.
HG Construction has an ISO 9001 Integrated Management System and pursues a policy of early engagement with clients, the design team and supply chain and a collaborative approach based on value engineering, buildability reviews and de-risking to ensure optimum, high quality solutions for our clients, on time and on budget.
The group delivers key packages directly across its schemes including mechanical & electrical work, cranes, concrete frames, piling and utility pods, to mitigate the risk of working with external third parties and to generate advantages for its clients. All HG Construction projects are serviced with group cranes, while 80% of piling is supplied directly.
Key HG Construction procurement contacts include:
Commercial director – Greg Purkiss, tel: 01462-454-444
Estimating director – Chris Yates, tel: 01462-454-444