PM Group annual results highlight strong international performance

Financial performance:

The Group reported revenue of €406 million (2017: €288 million) and operating profit of €15.6 million (2017: €9.1 million) for the year.

Overall revenue was up by 41% mainly due to a significant increase in “pass through” revenue and costs incurred on behalf of clients in carrying out procurement and contract activities. Fee revenue, which more accurately reflects underlying trading performance, was up 13% in the period, as a consequence of several major projects and a strong pipeline of new business. This performance increased operating profit by 71% on prior year. 

Net assets increased by 19% to €62 million, underpinning the Group’s capacity to drive development and growth through continued investment. The Group’s strategic plan “Controlled Profitable Growth – Phase 2” commenced in early 2018 and the results for the year reflect the successful initial implementation of the plan.

Operational performance:

Throughout the year, PM Group worked on projects in over 30 countries.  The Group had a strong year in Ireland with major projects in the Pharma, Mission Critical, Food and MedTech sectors and significant capital investment by core clients including for example MSD, Janssen, Boston Scientific, Eli Lilly and Takeda.

The existing business in the UK improved performance on prior year, despite the notable slow-down in capital investment due to Brexit uncertainty. The addition of PM PROjEN, acquired in January 2018, added to the overall improved UK earnings.

Operations in mainland Europe had a busy year with strong levels of activity in the Netherlands, Belgium, Poland and Switzerland.

In Asia, the Group made significant strides in China, where it has been operating for a decade. It was a very busy year in China completing projects for Zoetis, Genscript, Merck, IFF and Givaudan among others. There has been a surge in biologics as well as Cell & Gene therapy investments and, given its strong track record in this area globally, the Group is working on several significant projects in this sector. PM Group is currently project managing a number of large developments on greenfield and brownfield sites throughout China for international and Chinese clients, including a major distillery project in Chengdu. 

PM Group also enjoyed a successful year in North America and is growing strongly there. It delivered key projects for Pharma and MedTech clients in the US and the PM Group design hubs on the East and West coasts have been expanding. This year has seen even stronger levels of activity with the Group’s largest ever US project currently underway in Portland Oregon.

Employment:

PM Group now has more than 2,600 people worldwide, 900 of whom are shareholders in the Company. It is currently in the process of recruiting up to 200 people with another 100 to be recruited in 2020. 50% of these jobs will be in Ireland with the remainder spread through its international office network. A large proportion of these will be new graduates across all disciplines.

New acquisitions:

During 2018 PM Group made two strategic acquisitions. PM PROjEN in the UK, which is primarily focussed on the Chemicals, Energy and Utilities sectors.

In Belgium, the Group’s multi-disciplinary engineering operation is based near Antwerp and specialises in Petrochemicals, Manufacturing and Energy. The integration of both companies in the Group has been seamless.

Outlook:

The momentum from last year has carried through 2019 with numerous large projects in various stages of delivery and a healthy backlog. The Group anticipates at this stage that underlying revenue will increase again this year, with further growth in operating profits. It expects the positive momentum to be maintained into next year. 

Revenue and profit performance

Dave Murphy, CEO, PM Group said: “The Group experienced strong underlying revenue and profit performance in 2018 which has continued into this current year. The sustained activity levels of our clients in the sectors where we specialise is what is driving this strong performance. In addition to organic growth, we have added value-enhancing acquisitions in Belgium and the UK and, given the strength of our balance sheet, we have the capacity to acquire further complementary businesses in our core markets, particularly in the United States and Europe.

Significant progress in China

“We have made significant progress in China, having built a presence there over the past ten years. We are involved in projects across our specialist sectors along the eastern sea board as well as inland China. Our Board is visiting China next week to see first-hand a number of the projects we have managed as well as the pipeline of new business.    

Careers

“We have also grown employment substantially across the Group and particularly in Ireland with a highly successful Graduate Programme which attracts a variety of disciplines from third and fourth level education. Given the trajectory of our growth and the demands for additional expertise across the group, we are currently recruiting 200 net new positions and will add a further 100 by the end of next year.” 

Sustainable returns

Dan Flinter, Chairman, PM Group said: “PM Group has built a formidable business over the past 46 years and in 2018 made further strides in revenue growth and profitability and strengthened the balance sheet. As an employee owned company, we are committed to the delivery of sustainable long-term returns to our shareholders while broadening and deepening our involvement with chosen sectors and target locations.”