TClarke : Annual Report for year ended 31 December 2022 – Marketscreener.com

Annual Report and Financial Statements
2022
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TClarke Annual Report and Financial Statements 2022
Who we are
TClarke remains at the forefront of Building Services. Our innovation and expertise are employed in the design, installation, integration and maintenance of the mechanical and electrical systems and technologies that a 21st century building needs for control, performance and sustainability.
We currently operate from nineteen locations serving the whole of the UK. We are a proud employer of local people in the towns and cities that we serve.
Our reputation for high quality and the successful application of new technologies has been built over 133 years operating in five market sectors:
Contents
Strategic Report
2022 Key Performance Indicators (KPIs)
01
Chairman’s Statement
02
Purpose, Strategy and Values
03
Chief Executive’s Report
05
Market Sectors
09
Business Model
11
Group Financial Review
13
Being a Responsible Business
17
Engineering Services
Leading in mechanical, electrical and technology infrastructures, offsite manufacture and digital systems integration. Incorporating Modern Methods of Construction (MMC) that deploy prefabrication, pre-assembly and design standardisation.
Technologies
We design and deliver the critical mechanical and electrical infrastructure for data centres. We are a leader in smart buildings technologies.
Infrastructure
We focus on healthcare, education, defence and other areas of public sector infrastructure where high-level skills are most valued.
Residential & Hotels
Residential accommodation including luxury hotels, affordable homes, student accommodation and private residential.
Coatbridge
Eurocentral
Newcastle
Leeds
Manchester
Liverpool
Derby
Birmingham
Peterborough
Newport Oxford
Huntingdon
Stansted
Colchester
London Sittingbourne
Portishead
St. Austell
Plymouth
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Principal Risks
29
Task Force on Climate-Related Financial Disclosures (TCFD)
33
Section 172 Statement
36
Long-term Viability Statement
38
Governance
Board of Directors
39
Corporate Governance Report
40
Statement of Compliance
41
Audit Committee Report
45
Nomination Committee Report
48
Remuneration Committee Report
49
Directors’ Remuneration Policy
50
Annual Report on Remuneration
57
Directors’ Report
65
Statement of Directors’ Responsibilities
68
Independent Auditor’s Report
69
Financial Statements
Consolidated Financial Statements
75
Company Financial Statements
106
Shareholder Information
110
Facilities Management
We operate in the higher value and specialist areas of FM, with clients like Canary Wharf Contractors, BAE Systems, CBRE and UK and USA Airforce Bases.
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01 TClarke Annual Report and Financial Statements 2022
2022 Key Performance Indicators (KPIs)
Strategic Report
02
Chairman’s Statement
Strong
Financial
Social and
operating
strength and
environmental
performance
shareholder
value
returns
£426m
£7.5m
210
Group Revenue
Net Cash
Apprentices
2021: £327m
2021: £5.3m
Record intake of 50
apprentices in 2022
2021: 195
£11.5m
£2.6m
4.8
Operating Profit
Average month end
Emissions (tC02e)
2021: £8.8m
net cash
per £m revenue
2021: -£2.9m
2021: 5.8
2.7%
19.60p
0.32
Operating Margin
Earnings per share
Lost time incident rate
2021: 2.7%
2021: 14.99p
as a result of accidents
2021: 0.31
£555m
5.35p
58
Forward Order Book
Dividends per
Average supplier
2021: £534m
share
payment days
2021: 4.85p
2021: 60
For further information and for a definition of forward order book and dividend per share, see pages 13 and 15 of the Group Financial Review. See page 15 for definition and calculation of net cash. KPI performance is described within the Strategic Report.
In 2022 TClarke has again continued to grow and deliver excellent results. Our record revenue of £426m is a significant step towards achieving our near-term target of £500m annual revenue. Our operating profit is £11.5m at a margin of 2.7%, which is an outstanding result in the current economic and political environments in which we operate.
Our growth and margin performance is a result of the successful implementation and delivery of our strategy. It is also the result of effective and continuous strategic and operational management oversight and direction, supported by strong financial, management and delivery disciplines which are constantly and consistently applied across the Group.
We continue to grow and successfully deliver in our core Engineering Services markets; we are experiencing significant growth across our chosen market sectors. This is particularly the case in the Technologies sector, where revenue has trebled to £145m. The Technologies sector is benefiting from the investments we have made in capabilities, leadership and client relationships over the last few years.
The forward order book stands at £555m (2021: £534m) of
which £430m (2021: £379m) represents committed revenue for 2023.
Building on our existing balance sheet strength is another key part of our strategy as we grow the business. Net assets of the Group have grown by 46% during 2022 and now amount to £38.7m (2021: £26.5m). Within this net cash has increased to £7.5m (2021: £5.3m).
We are fully committed to a progressive dividend policy while at the same time balancing the interests and needs of all stakeholders. We are proposing a 2022 final dividend of 4.1p per share (2021: 4.1p), which together with the interim dividend of 1.25p paid in October 2022 brings the full 2022 dividend to 5.35p per share (2021: 4.85p), an increase
of 10.3%.
Throughout 2022 TClarke has continued to build and deliver on our commitment to being a sustainable business, delivering ever improving environmental and sustainability performance and targets. We have become a Business Champion with Build UK demonstrating our commitment to the Construction Leadership Council’s zero carbon change programme. During the year, we have also embedded stronger sustainability targets and requirements into our procurement strategy and supplier requirements and into our fleet management systems.
At TClarke we recognise that our growth and success could not be delivered without the skills, experience, focus and commitment of our people, subcontractors and suppliers in all areas of the business. We continue to invest heavily in our resources to ensure we have the capacity and skills to deliver our growth ambitions in both our core Engineering Services market and our identified strategic growth markets. For example, we currently have 210 apprentices, representing 16% of our people, which is significantly above the industry norm of 5%. This is a substantial and positive investment made with our confidence in TClarke and the future.
The Board was strengthened by Aysegul Sabanci’s appointment as a non-executive director on 1st May 2022. Aysegul’s experience in operating in Europe in particular, will be invaluable as we expand our operations.
As we move through 2023 and beyond, we face significant external economic and national and geopolitical challenges and uncertainties which will affect all businesses and sectors. As I look forward, however, I am confident that TClarke is well placed to address and work through these challenges and continue to perform and deliver. Our strategy is well developed and being successfully implemented. This together with our strong commercial and management focus and controls gives TClarke the strength and stability to continue to grow, prosper and perform. We have the capacity, the order book and the opportunities.
The TClarke brand is very strong, built upon our reputation for high quality engineering, reliability and on time delivery. This is made possible through the collective efforts of all of our people. It is their outstanding effort and output that enables us to grow and perform and to face the future with confidence.
Iain McCusker
Chairman
20th March 2023
03 TClarke Annual Report and Financial Statements 2022
Purpose, Strategy and Values
Our purpose is inspiring talent to deliver excellence in our chosen markets
We believe we can make a difference
Our strategy is to pursue organic growth by focusing on our five core market sectors; Engineering Services, Technology, Infrastructure, Residential & Hotels and Facilities Management.
Our strategic priorities
The following priorities are essential to achieving our purpose and strategy:
Increase our quality of earnings
Through project selectivity, operational efficiency and Investment
Secure long-term workstreams Through client and partner relationships, generating repeat business
Excel in project delivery for our customers
Maintain a strong balance sheet and significant levels of available funds at all times
Being a responsible business
Strategic Report
04
Our core values drive our culture
The customer comes first
Talented people are key to our success
We must adopt new technology and drive change
Consistent achievement is key to our future
05 TClarke Annual Report and Financial Statements 2022
Chief Executive’s Report
Strategic Report
06
A Resilient and Successful Business
Few other years in the history of TClarke. Have seen world events reshape our outlook like the last two. Yet despite all the challenges, TClarke has stayed true to its values and remained a unique and successful business, a great employer, and the partner of choice for our customers and supply chain. My thanks go to our people, customers, partners, shareholders, and the community for your continued support.
Delivering Our £500m Strategy
All in our sector have witnessed inflationary pressures and supply issues during the course of the year; generally our teams have been able to mitigate any impact on a project-by-project basis, without disruption to our operations.
We have previously declared our ambitious plan to achieve profitable revenues of £500m by the end of 2023 and I am pleased to report that the continued strength of our forward order book – of £555m and over £1bn of active opportunities
– means we remain on track to achieve it.
Our order book has been replenished whilst maintaining our disciplined and selective bidding approach to opportunities, which is even more crucial in times of economic uncertainty; this business is not driven by winning projects that do not have the opportunity to return an acceptable margin.
Our business model is very straightforward and designed to provide consistent, balanced and complementary work stream opportunities for our five market sectors, across our UK locations. Its effectiveness is evidenced by our 2022 revenues which we have grown by almost £100m in 2022 delivering revenue of £426m; exceeding £400m for the first time (2021: 327m). This is a remarkable achievement and is a testament to the dedication of our people and the commitment and teamwork of our supply chain. A breakdown of our revenues is shown below:
£145m Technologies, including Data Centres & Smart Buildings
£125m Engineering Services
£80m Infrastructure
£45m Residential and Hotels
maintaining our premier position in our five core market sectors whilst growing revenue from larger projects outside of London, expanding our healthcare offering, becoming a major player in the data centre market and investing in our capability to deliver smart building solutions. 2022 revenues from these growth areas total £220m (2021: £90m) and are shown below.
£129m UK Data Centres
£47m Healthcare projects
£37m Larger projects outside London
£7m Developing innovative smart building solutions.
2021 revenues were £39m, £31m, £16m and £4m respectively.
The standout growth revenue stream is from UK Data Centres where TClarke is delivering five data centres as principal contractor. There remain many opportunities for growth in this sector and we expect Data Centres to continue to contribute significant revenues in the medium term.
We now have 19 projects outside of London which have a contract value of £5m or more where we are either on site or the project is in the order book due to commence in 2023 or 2024.
What makes TClarke Unique
Brand and Heritage
Since 1889, when we pioneered the most advanced technology of the age, we have constantly changed and evolved our skill base to stay at the edge of technology and technical skills. But the emphasis on quality jobs for quality clients has never changed.
In the 21st century we must embrace new challenges, none greater than to mitigate the impacts of climate change. TClarke is committed to achieving net zero emissions and has a detailed road map in place to achieve this by 2026. To ensure we and our sector achieve sustainable results in reaching this goal, we are working collaboratively and tirelessly aligning with our customers and working with our partners and suppliers to provide the innovative engineered solutions that are needed, in many cases pioneering or
risks, with established and well-defined processes throughout the life of a project.
Our unique retention rate and the depth and length of relationships we build with our clients and supply chain is a testament to the strong culture at all levels within our business.
It is no coincidence that we maintain a record order book having closely aligned ourselves with clients particularly major developers in London who have shown a long term commitment to the markets we operate in.
Onsite Resource
We have always believed that by giving our people lifelong career paths, we can build a stronger business and play a leading role in our communities.
No one matches our ability to dedicate our high quality, established teams complemented by our two prefabrication facilities in Stansted, Essex and Coatbridge, Central Scotland to our clients’ projects. Those facilities help us maximise the use of MMC (Modern Methods of Construction), improve onsite logistics, reduce waste, and meet our environmental goals.
Growing our business and achieving our ambitions could not happen without the relentless drive and quality of our in-house teams. Our competitors, whose models are overly dependent upon the use of sub-contractors cannot achieve this.
Last year, we invested £6m (2021: £6m) in our apprentices across the UK. These ongoing investments lead to an exceptional and unique wealth of future talent, designed to deliver both skilled operatives and future leaders in volume and quality to meet our needs.
Engineering Expertise
Risks and rewards are highest for larger, more complex projects such as commercial offices, luxury hotels and leisure complexes, hospitals and major education or research facilities. This drives clients and principal contractors towards engineering services providers such as TClarke which
have the necessary skills, governance and financial strength required to mitigate those risks.
Our team has the depth of experience, knowledge, and talent that no other company can match. Our staff are driven with passion and pride to complete projects across the electrical, mechanical, and technologies sectors. We have completed major and complex landmark projects that no other team in the market can match. Crucially, our expertise stays in our business and builds over time. This body of knowledge allows us to hand pick the right team for our clients’ project needs.
An insight to our activities is provided in the following pages of this report, but some notable highlights include, at the end of 2022 TClarke was active on five UK data centre projects with further opportunities of additional phases.
In London, the excellent performance of our engineering services teams continues, recent project wins include a major infrastructure project at Canary Wharf, a commercial office scheme at 76 Upper Ground on London’s South Bank and the refurbishment of two landmark five star hotels in the West End.
In Cambridge we secured Phase 2 of Unity Campus which features three new wet laboratory buildings of 32,5002 ft, 31,0002 ft and 24,5002 ft.
Our Infrastructure teams remain focused on the major areas of public sector infrastructure where complexity and new technologies play to our skill and quality advantages. During the year we enjoyed ongoing success in education, delivering 76 education projects and adding 42 new education projects in the forward order book.
We continue to work in hospitals across the country delivering major upgrades to the healthcare infrastructure. For example, TClarke has delivered a major CT and MRI facility for Basildon University Hospital. TClarke continues to win major projects such as the National Rehabilitation Centre which is one of the first of 40 new hospitals to be built by 2030.
£31m Facilities Management
Full Breakdown and comparatives can be found on pages 9 and 10.
The Group has invested, proactively and heavily in resources and capacity, to ensure our growth ambitions are fully supported, and our clients’ projects are delivered on time.
Our organic growth strategy is based on the established engineering strengths of the business and targets additional revenue streams – which are now contributing significantly towards our £500m revenue goals. We are focused on
learning new skills.
In 2022 TClarke successfully achieved Build UK Business Champion status within the Construction Leadership Councils Co2nstruct Zero programme; the industry’s zero carbon change programme.
Client Retention
Our client retention rate is an integral part of the success of TClarke and 90% of our projects are with repeat clients and or principal contractors. We are rightly proud of the projects that we have secured and continue to deliver. Our focus remains on being selective when tendering projects and managing the
Onsite Resource
Client Retention
Technology Leadership
What makes
Nationwide Capability
TClarke
Unique
Engineering Expertise
Brand and Heritage
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T.Clarke plc published this content on 12 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2023 07:09:08 UTC.

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