Length of time contractors take to pay revealed
The length of time some of the country’s biggest contractors take to pay their suppliers has been revealed as part of a new government initiative.
The figures show how payment practices differ across the industry, with firms taking anywhere from 34 days to 81 days to pay.
Among the best performers was Higgins Construction, which takes an average of 34 days to pay suppliers. A total of 46% of its invoices are paid within 30 days, with 50% paid within 60 days.
At the other end of the scale, Kier Construction took 59 days to pay on average, with 32% of invoices paid within 30 days and 34% within 60 days.
McNicholas Construction Services, also now part of the Kier Group, took 81 days, with just 4% of invoices paid within 30 days and only 18% paid within 60 days.
Among other firms on the list, Lendlease Construction (Europe) took 38 days on average, with 46% of invoices paid within 30 days and 41% paid within 60 days.
Stirling-based Ogilvie Construction also took an average of 38 days (with 31% of invoices paid within 30 days and 62% paid within 60 days).
Bowmer & Kirkland took an average of 41 days, Galliford Try Group averaged 42 days, McLaren Construction averaged 46 days, and Midas Construction took 48 days on average.
Concrete frame contractor Byrne Bros averaged 55 days.
The figures were revealed after the government introduced new rules in April last year, requiring firms with a turnover of more than £36m and at last 250 staff to report their payment performance.
Companies have to publish their payment details within seven months of their first annual results after April 2017 and as a result, more companies will be added to the list as the year progresses.
A Kier spokesperson said: “Our payment terms and timing of payments to our supply chain partners remains a very important area of focus and a responsibility we take very seriously.
“We are actively working to drive through further improvement. On average 35-40% of Kier Construction payments are made through the Kier Early Payment System (KEPS), which distorts our overall payment days figure as this is factored in at an average of 90 days.
“In reality those supply chain partners are being paid at 21 days via KEPS.”
A Galliford Try spokesperson said: “Long payment terms are an issue that the sector as a whole continues to grapple with.
“Galliford Try maintains excellent collaborative relationships across our supply chain and we are committed to fair and transparent payment processes.”
Construction Manager has also contacted Higgins, Ogilvie Construction, McLaren Construction, Byrne Bros, Midas Construction and Bowmer & Kirkland for comment.