2021
Annual Report and Financial Statements
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TClarke
Annual Report and Financial Statements 2021
Who we are
Engineering Services
Leading in mechanical, electrical and
technology infrastructures, offsite manufacture
(DfMA) 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 growth areas of public sector infrastructure
where high-level skills are most valued.
Residential & Hotels
This sector is a comparable size to
Infrastructure and covers all types of
residential accommodation including luxury
hotels, affordable homes, student
accommodation and private residential.
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.
TClarke remains at the forefront of the Building Services industry. 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 twenty 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 130 years operating in five market sectors:
Contents
Strategic Report
Chairman’s Statement 01
Chief Executive’s Report 02
Market Sectors 06
Our Strategy 08
Group Financial Review 09
Business Model 12
Section 172 Statement 14
Environmental, Social and Governance Report 16
Principal Risks 26
Long-term Viability Statement 30
Governance
Board of Directors 31
Corporate Governance Report 32
Statement of Compliance 33
Audit Committee Report 37
Nomination Committee Report 40
Remuneration Committee Report 41
Directors’ Remuneration Policy 42
Annual Report on Remuneration 49
Directors‘ Report 57
Statement of Directors‘ Responsibilities 60
Independent Auditors‘ Report 61
Financial Statements
Consolidated Financial Statements 68
Company Financial Statements 105
Shareholder Information 109
ABERDEEN
NEWCASTLE
LEEDS
MANCHESTER
PETERBOROUGH
HUNTINGDON
COLCHESTER
SITTINGBOURNE
EUROCENTRAL
DUMFRIES
LIVERPOOL
DERBY
BIRMINGHAM
NEWPORT
PORTISHEAD
PLYMOUTH
ST. AUSTELL
STANSTED
LONDON
LONDON
UK SOUTH
UK NORTH
OXFORD
Strategic Report
01
TClarke has continued to grow and deliver outstanding
performance and results in 2021. Our revenue of £327m
has exceeded the target of £300m that we set at the start of
2021. Our operating profit is £8.8m; over £6.5m of which was
delivered in the last 6 months of the year at a margin of 3.3%
as our revenues accelerated.
The success of our strategies and deliveries, the quality of our
products, services and methods, and the strength and depth
of our client relationships have enabled significant progress
to be made in the achievement of our medium term revenue
target of £500m.
While we continue to grow and deliver in our core
Engineering Services markets, we are also delivering
significant growth and performance in our strategic growth
sectors, particularly Technology, in which we have developed
capabilities, leadership and new client relationships. These
are making a significant and growing contribution to our
revenue growth and target. This growth and performance is
supported by strong financial, management and delivery
disciplines which are constantly and consistently applied
across the Group. The forward order book stands at a record
level of £534m, an increase of 17% on the year, of which
£379m represents committed revenue for 2022. The
proportion of the order book represented by Technology has
risen to 25% from 10% in 2020.
We know that our shareholders and investors value our
progressive dividend stream. We continue to be fully
committed to a progressive dividend policy while at the same
time balancing the needs and interests of all stakeholders.
We are proposing a 2021 final dividend of 4.1p per share,
which together with the interim dividend paid in October
2021 brings the full 2021 dividend to 4.85p per share – an
increase of 10%.
TClarke is committed to becoming a more sustainable
business, delivering improved environmental and
sustainability targets and performance. It is TClarke’s
ambition to be a Business Champion with Build UK
demonstrating our commitment to the Construction
Leadership Council’s zero carbon change programme
CO
2
nstruct Zero
. The Environmental, Social and Corporate
Governance section of the report sets out to explain in
detail our approach.
Our growth and success is delivered through the skills,
experiences, 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 to deliver our growth ambitions.
We are strongly committed to developing and adding to
the skills and experience of our people through our national
apprenticeship schemes and our personal and management
development frameworks, and to be the employer of choice
in our markets. For example, we currently have 195
apprentices representing 16% of our people whilst the
industry norm is just 5%. This is a significant investment made
with the long term belief in TClarke.
I look forward to 2022 and beyond, confident in our ability to
deliver our growth strategy. We have the capacity, a healthy
order book and many opportunities. The TClarke brand is
very strong, built upon our reputation for high quality
engineering, reliability, and delivery on time. This is made
possible through the collective efforts of all our people. It is
their outstanding effort that has allowed us to be so
optimistic for the future and I want to thank them all for their
hard work and dedication.
Iain McCusker
Chairman
8th March 2022
Chairman’s Statement
TClarke
Annual Report and Financial Statements 2021
For further information and for a definition of underlying, forward order book and dividend, see page 09 of the Group Financial Review.
See page 101 for definition and calculation of net cash.
Group Revenue
£327.1m
2020: £231.9m
Underlying
Operating Margin
2.7%
2020: 2.6%
Underlying
Operating Prot
£8.8m
2020: £6.0m
Prot
Before Tax
£7.
8 m
2020: £1.2m
Underlying Earnings
Per Share
14.99p
2020: 10.29p
Earnings
Per Share
14.99p
2020: 2.87p
Forward Order Book
£534.2m
2020: £456m
Dividend
4.85p
2020: 4.4p
Net Cash
£5.3m
2020: £10.2m
2021 in Numbers
2021 underlying and reported numbers are the same
as there are no non-underlying items.
Strategic Report
TClarke
Annual Report and Financial Statements 2021
02
03
Chief Executive’s Report
Ready to Deliver
TClarke is a trusted engineering partner to blue chip clients
and principal contractors. Within this report I set out our
strategic plans and achievements for the past year but more
importantly describe with confidence how the business is
achieving its goals.
Last year we committed to a strategy of moving TClarke to
the next level and we described very clearly and concisely
our ambitions, whilst adapting quickly and decisively to the
continually changing circumstances that the country faced.
TClarke aims to be a £500m revenue business with
sustainable margins of 3% supporting a progressive dividend
policy. Our business is underpinned by strict financial and
operational controls and strong governance. Our growth
ambitions are supported and financed without the need for
often risky and distracting acquisitions.
New Revenue Streams
Within our business model we target five market sectors
(the breakdown of which can be found on pages 6 and 7).
Our established annual revenues for the business are around
£330m and our strategy to reach revenues of £500m is based
upon these five established sectors and the new revenue
streams described below which should easily generate an
additional £170m of annual revenues.
• Securing larger projects outside of London with typical
• Securing data centres particularly in the UK, with typical
• Securing healthcare projects across the UK with typical
• Developing innovative smart building solutions which
I am confident that our £500m revenue target can be
achieved by organic growth whilst remaining true to the
established engineering strengths of the business.
This strategy is evidenced by the continuous growth of our
forward order book; our order book stood at a record £534m
as at 31st December 2021 (£456m 31st December 2020). The
order book growth has been achieved whilst continuing to
follow our selective tendering approach.
Investing in the Best People
Differentiated by the quality of our people and their
relentless drive to deliver the most successful projects, the
ability to grow our business and meet our ambitions could
not be achieved without the dedication of our great teams.
Our careful attention to resource planning will ensure we
always match our capacity to our available teams.
Being one of the few industry trainers of apprentices across
the UK leads to a wealth of future talent, designed to deliver
both engineering operatives and future leaders in volume
and quality to meet our needs. The ability to deliver projects
primarily with a trusted reliable workforce ensures that our
£170m
Target Growth
£330m
Established Business
Strength
£500m Revenue Roadmap
reputation for quality and delivery on time is more secure
compared to that of our competitors whose models are
dependent upon the use of sub-contractors.
Scale and Resource Across the UK
TClarke is very well established in its London heartland and
2021 has seen significant progress in ensuring that we can
offer our clients the same scale and breadth of services
across the UK. During 2021 we expanded our capacity in our
Engineering Services Divisions in Falkirk, Peterborough and
Newcastle; the increased opportunities are now translating
into additional revenues for these locations.
Our teams in Manchester and Peterborough have been
successful in securing four projects valued in excess of £25m
for an international financial institution at several locations
including two solar farm projects covering 1,800 m
2
and our
new Oxford office celebrated its successful opening by
securing a project at the prestigious Oxford Saïd
Business School.
We continue to invest in our own purpose-built facility at
Stansted, that supports Modern Methods of Construction
(MMC). The use of offsite prefabrication benefits our clients
and can bring programme certainty and factory standard
quality, and by utilising less on-site resources gives us more
capacity to deliver additional revenues as a part of our
strategy to achieve £500m revenue.
Previously our regional teams would have focused on the
smaller to medium sized projects, often teaming up with local
partners. Today from our three operating divisions that serve
20 UK locations, we offer the full range of Engineering
Services, alongside all the complementary technology and
smart building solutions, backed up by technical expertise.
TClarke is proud to be based in the communities it serves
and wants to ensure that we offer our teams the best
environments to collaborate, share knowledge and build
exciting careers. In October our team in Manchester moved
to larger premises in Salford Quays, in early 2022 our teams
in Falkirk will be moving to new offices in Eurocentral,
Scotland and our London Head Office will relocate to
30 St Mary Axe whereby our teams will operate from a single
productive floor space.
Exponential Growth in Data Centre Opportunities
The growth in the demand for data centres has been
fuelled by the needs of cloud storage, more devices being
connected to the internet (IoT), gaming, streaming services,
e-commerce, the arrival of 5G and the working from
home revolution.
The UK data centre market is the largest in Western Europe.
Brexit and the switch to new UK specific data protection
•
Data Centres
• Healthcare
•
Smart Buildings
• Large Projects Outside London
•
Engineering Services
• Technologies
•
Infrastructure
• Residential and Hotels
•
Facilities Management
£330m is the normalised annual turnover revenue for our core markets
and is not a forecast for turnover in 2022
£500m
Strategic Report
TClarke
Annual Report and Financial Statements 2021
04
05
Chief Executive’s Report
continued
collaborative approach is highly valued and has led to
TClarke becoming the preferred contractor on significant
hotel schemes in London’s West End.
Our UK North and UK South teams both won significant
major residential projects as part of our targeted tendering
approach. Building our order book with these quality
residential projects and quality relationships is key to
sustainable long-term growth and repeat business. The
trend towards more complex, high value residential
developments featuring a range of luxury facilities has
substantially increased the complexity and value of package
of works in those projects.
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
63 education projects and adding 36 new education projects
in the forward order book.
Educational projects that were completed last year include:
• Foxgrove School, Leatherhead
• Nanksar Primary School, Hillingdon
• Pinner High School, Harrow
• Tring School, Hertfordshire
• Turing House, Richmond
• Uckfield College, East Sussex
In summer 2021, a further 50 new schools were announced
within the second round of the UK government’s School
Rebuilding Programme which is due to deliver 500
rebuilding projects over the next decade we are confident
that this sector will continue to be a good revenue stream.
Summary and Outlook
Our people share our vision for the future of TClarke. We are
a business with people on the ground delivering our projects.
Their innovation, commitment and dedication is something
that this business is rightly proud of.
Our order book will translate to record revenues; TClarke can
offer our clients the widest possible solutions from a single
contractor, utilising our resources so that they are assured
we have the ability to deliver. That’s why we believe TClarke
remains the contractor of choice for so many and we remain
focused on maintaining our market leading position.
We start 2022 in excellent shape and well placed to deliver
a strong future performance.
Mark Lawrence
Group Chief Executive Officer
8th March 2022
legislation has led many organisations to open or expand
data centre facilities. Several large-scale developers have
entered the data centre market in the last 12 months. Arizton
Advisory and Intelligence predict the UK data centre market
size to reach £6bn by 2026.
At the end of 2021 TClarke were active on 5 data centre
projects with a collective value of £150m with further
opportunities of additional phases. Depending on the pace
of our clients’ expansion plans this value could grow by
negotiation by an additional £75m. Through 2022 we are
aware of and tracking bidding opportunities of circa £900m
and a further pipeline of project opportunities that will build
out well into 2026.
The strength of the TClarke balance sheet and the depth of
our engineering resources means we expect to see strong
growth within our revenues in the technologies sector. This
could represent at least 30% of our expanded annual
revenues in 2022 and beyond.
Healthcare, Healthcare, Healthcare
The 2021 UK Government Spending Review confirmed a
total of £100bn of investment in economic infrastructure up
to 2024-25. The Chancellor of the Exchequer announced
that this includes a £5.9bn capital investment in the National
Health Service (NHS) in addition to the £12bn per year that
was promised in September 2021. The NHS has launched a
six year National Framework Agreement for the provision of
Smart Building Solutions, TClarke has successfully secured a
place on this framework agreement.
Secured orders in healthcare schemes now stand at £42m.
In addition, we have preferred bidder status for a further £63m
of projects. Whilst it takes longer to convert a tender to a
secured order in this sector there are tremendous
opportunities both as a participant in one of the seven
frameworks we are on, but also from standalone capital projects.
Example of secured projects within the Group include:
• Modernising Medicine - Kings College Hospital NHS
• Emergency Department Refurbishment - Royal Devon
• New MRI and Oncology Unit – Royal Cornwall
• Infrastructure Upgrade – University Hospitals Bristol and
• Emergency Department Refurbishment - Luton and
A Smart New World
Our clients are setting ambitious decarbonisation plans.
Smart Buildings - new or retrofits - will be integral to UK
plans to reduce its carbon footprint and control energy
consumption. The global smart building market is projected
to triple in the next decade. The increasing costs of energy
and legislation related to the environment in areas such as
carbon emission and pollution are all driving building owners
towards smart building solutions.
Our technologies business recently secured the Smart
Buildings contract for the European Bank of
Redevelopment at One Bank Street, including the role of
Master Systems Integrator.
Taking part in the smart buildings revolution involves the
design and installation of the building’s mechanical, electrical,
security and safety systems – all existing TClarke strengths.
As we move forward each project opportunity that we bid
has the ability to lead to a Smart Building Opportunity for our
Technologies Division. Furthermore, by utilising our shared
workforce and project teams, the more of our services from
our Mechanical, Electrical and Technologies teams that are
selected, the more compelling the value engineering solu-
tions we can offer to our clients.
The Specialist Contractor of Choice
Risks and rewards are highest for larger, more complex
projects such as commercial offices, luxury hotel 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.
In London the excellent performance of our engineering
services teams has not only completed significant schemes
such as Project Green and 1 Newman Street, but has also
been rewarded with landmark wins such as the Apple fit out
at Battersea Power Station, Plot A2 at Canada Water and
Building S4 at the International Quarter London, our 4th
successive project win at this development in Stratford.
TClarke has experienced a mini boom in luxury and high-end
hotels. We successfully completed the Pan Pacific Hotel, and
the Hilton City Canopy Hotel in London and work continues
on the Peninsular Hotel at Hyde Park Corner. This is another
major market sector where the quality of our work and