Glasgow-based contractor seizes silver lining from ISG collapse
Written by admin on June 23, 2025
Business opportunities following the collapse of ISG have helped diversified contractor Morris & Spottiswood to boost its pre-tax profit, as it targets turnover of £260m-£280m in two years’ time.
Newly released accounts from the Glasgow-based group show a 71 per cent profit hike from £2.8m to £4.7m in the year to 31 December 2024.
Turnover grew by a third from £128m to £172.5m, resulting in a broader margin of 2.7 per cent compared with 2.2 per cent in 2023.
The latest result means the firm hit its target of £150m revenue by 2026 two years early, chief executive Jon Dunwell told Construction News.
Dunwell said he expected the financial growth trend to continue. “This year, I think we’ll do about £200m [in turnover]. Our target for the next two years is £260m-£280m, so it’s quite rapid expansion,” he said
Repeat business and frameworks are expected to account for 70 per cent of turnover, but Dunwell said the firm also aimed to acquire a facilities management company, adding: “I want to grow that nationally.”
The improved financial performance was partly due to the fall of ISG in September 2024. Morris & Spottiswood said it recruited more than 100 staff from its collapsed rival ISG Retail the following month, including the senior management team.
This move brought “new blue-chip clients… including major financial institutions and key large retailers”, directors said in their strategic report within the accounts.
“As this took place at the end of the year the impact on the 2024 financials was limited, although [it] still accounts for 18 per cent of the turnover growth,” they added.
Turnover and profit growth last year also resulted from higher demand from clients in the financial sector and the renewal of multiple frameworks, the accounts said.
Dunwell emphasised Morris & Spottiswood’s holistic service offering, derived from its diverse portfolio of companies specialising in fit-out, mechanical and electrical (M&E) services, offsite fabrication, refurbishment and new-build housing.
The component parts work on standalone projects but also come together to provide what he described as a “circular delivery model” for clients.
This keeps costs down and maintains margins by removing the extra expense that can occur with a lengthy external supply chain, Dunwell said.
A diverse workload spread across a variety of sectors serves to “mitigate risk of a downturn in any one sector”, directors added in the firm’s accounts.
Last year, Morris & Spottiswood set up an in-house joinery service and established an interior fit-out business called Inspire Spaces (FF&E) Ltd.
M&E subsidiary Livingston Building Services is poised for further growth after acquiring fellow Scottish firm JB Engineering – which specialises in offsite manufacturing, modular assembly and packaged plant rooms services – last November.
Cash at hand and dividend payouts each rose. The former grew by two-thirds from £13.6m to £23.2m, and the latter increased from £100,270 to £1.2m.
“Cashflow projections up to the end of 2026 demonstrate the ability to meet working capital requirements from reserves with a reasonable level of headroom,” directors said.
Short-term repayable loan debt remained stable at £522,680, although the firm reduced its loans falling due after more than a year from £1.3m to £884,130.
The acquisition of ex-ISG staff was the main factor behind an increase in average monthly headcount – up from 449 to 562 employees – and an annual wage bill that rose by a third from £26.9m to £35.7m.
Morris & Spottiswood operates offices in Carlisle, Livingston, Leeds and Warrington, plus new premises in Bristol, Huntingdon and Whitstable.
The firm has just moved into an expanded London office, Dunwell added, with further “significant growth” envisaged in southern England this year as the firm takes on even more ex-ISG clients.
Morris & Spottiswood is also completing an 18,000 square metre ex-ISG office fit-out job for an unnamed financial client in central London.
In February, it took over the job to complete an £8m distillery in the Inner Hebrides, left unfinished after ISG’s collapse.
Elsewhere, the firm also won a place on the University of Glasgow’s £500m construction framework in February this year.
