NG Bailey, the UK’s largest independent engineering, IT and facilities services group, has announced a strong financial performance for the year to 27 February 2015, with a 43 per cent rise in underlying operating profit to £3m.

Announcing the results, the company said the growth in operating profit – achieved despite an investment of £2.7m in new services – is underpinned by its strategic goal to create a more diversified business that is much less reliant on traditional building construction work.

NG Bailey’s long-term strategy places a greater emphasis on services – such as IT, energy and facilities management – and on engineering construction, particularly large infrastructure projects.

The success of the diversification strategy is reflected in a 20 per cent growth in sales within its services businesses – including a 28 per cent increase within Facilities Services and a seven per cent increase in IT Services – while sales in building construction declined by 16 per cent. Overall sales fell slightly, by four per cent, to £365m.

During the period, NG Bailey’s secured order book increased from £550m to £590m, with the company named as preferred bidder on a further £140m of work – taking its forward order book at year end to a record £730m.

Since the start of the 15/16 financial year, NG Bailey has been named preferred bidder on a number of further contracts including the £460m electrical package at EDF Energy’s proposed Hinkley Point C new nuclear power plant in Somerset – in partnership with Balfour Beatty. This takes the company’s potential forward order book to more than £1bn.

David Hurcomb, chief executive at NG Bailey, said:

“This is a strong result. We are all aware the economic environment is improving, but we also know that it is taking time to filter through to our industry.

“It’s still tough out there, particularly in building construction. Margins remain under pressure across the supply chain, which is why we seek to avoid bidding high-risk, low margin work.”

“That said, all of our divisions performed profitably, which gives us a strong platform for developing a long-term, sustainable, business.”

NG Bailey’s chairman, Kevin Whiteman, added: “Continuing to transform the shape of NG Bailey will also ensure that we carry on delivering long-term value for our shareholders. We have a very strong balance sheet with no debts and over £83m in net assets.

“We continue to invest in the business, including £3m a year on the training and development of our 2,500 strong workforce, as well as the £2.7m we invested in new services. I am very pleased with the result and am confident that we’ll see even stronger growth as the market improves over the coming years.”

The group’s profit before tax on ordinary activities for the year was £4.2m, down from £6.9m the previous year, due to lower realised investment returns.