Margin Bridge — Meridian M&E Ltd — Mar → Apr 2026

01

Bridge Summary

Portfolio margin improved by +£64k in April, lifting the blended rate from 20.8% to 21.4%. This is the first month of positive margin movement in three periods and brings the portfolio within 0.6pp of the 22.0% target.

The largest positive driver was approved variation recovery of £68k on the Whitmore Tower contract, where an asbestos-related scope change was agreed with CBRE after a two-month negotiation. Subcontract outturn savings of £24k on Docklands Phase 2 and a net £12k adjustment across smaller contracts also contributed.

Negative movement came from prelim overruns (£18k, primarily Cathedral Quarter where programme slipped by two weeks), labour reallocation (£14k, cross-charging between Pennine and Trafford Retail) and FM deductions (£8k on Riverside FM, currently under dispute with Mitie). Without the variation approval, margin would have declined for a fourth consecutive period.

02

Margin Waterfall £'000s

03

Driver Detail

Positive drivers — +£104k

Variation Recovery

Approved claims & adjustments

+£68k

Whitmore Tower — asbestos scope +£62,400

Docklands Ph 2 — access ramp +£3,800

Mersey Gateway — daywork adj. +£1,800

Whitmore asbestos claim — two-month negotiation with CBRE. Final agreed figure £62.4k against £68k submitted. 92% recovery rate. Notice was issued within 48 hours of discovery via Commercial Control Kit™.

Subcontract Outturn

Final account savings

+£24k

Docklands Ph 2 — steelwork pkg +£16,200

Alderley Park — ductwork +£5,400

Whitmore Tower — tiling +£2,400

Docklands steelwork package was competitively re-tendered after original subcontractor withdrew. Replacement package came in £16.2k below allowance. Alderley and Whitmore savings are final-account adjustments against measured quantities.

Other Net Adjustments

Sundry items & corrections

+£12k

Pennine Pkg C — material credit +£6,800

Trafford Retail — cost reclass. +£3,100

Cathedral Qtr — accrual release +£2,100

Pennine material credit relates to returned unused cable trays (March over-order). Trafford reclassification was a March cost posted to wrong cost code, now corrected. Cathedral accrual no longer required after scope reduction confirmed.

Negative drivers — −£40k

Prelim Overrun

Extended programme costs

−£18k

Cathedral Quarter — 2wk slip −£12,400

Trafford Retail — welfare ext. −£3,600

Pennine Pkg C — site security −£2,000

Cathedral Quarter programme slipped due to late design information from ISG architect. Time claim under review — if successful, £8k of this overrun would be recoverable. Trafford welfare extension is a one-off cost for additional portacabin.

Labour Reallocation

Cross-contract charges

−£14k

Pennine Pkg C — 2 engineers −£8,200

Trafford Retail — supervisor −£5,800

Two electricians moved from bench to Pennine to cover programme acceleration. Trafford required an additional supervisor for night-shift works not in original plan. Both are one-off costs — not expected to recur in May.

FM Deductions

SLA penalty charges

−£8k

Riverside FM — P1 response −£4,800

Riverside FM — evidence gap −£3,200

Both deductions are currently disputed with Mitie. P1 response deduction relates to a call logged outside agreed hours. Evidence gap relates to missing sign-off photos — ops team has since located these. Commercial Director escalating in May.

04

Six-Month Margin Trend

Period	Revenue	Cost	Margin £	Margin %	vs Target	Net movement	WIP	CNI
November 2025	12,400,000	6,280,800	1,142,200	22.3%	+0.3pp	+£38k	218,000	142,000
December 2025	12,800,000	6,542,400	1,168,600	21.8%	−0.2pp	−£26k	264,000	158,000
January 2026	13,200,000	6,890,400	1,196,600	21.2%	−0.8pp	−£18k	296,000	176,000
February 2026	13,600,000	7,112,000	1,208,800	21.0%	−1.0pp	−£12k	318,000	192,000
March 2026	13,800,000	7,396,800	1,203,600	20.8%	−1.2pp	−£5k	345,000	208,000
April 2026	14,200,000	7,606,000	1,267,600	21.4%	−0.6pp	+£64k	387,000	214,000

Margin trend observation

April breaks a three-month decline. The recovery is primarily event-driven (Whitmore variation approval) rather than structural. If the two disputed FM deductions are overturned and the Mersey Gateway claim is approved, May margin could reach 21.8% — within 0.2pp of target.

WIP trend concern

WIP has risen in every period since November, from £218k to £387k — an increase of 78%. This is the highest-priority operational issue. The Riverside FM and Cathedral Quarter application blockers must be resolved in May to prevent the 90-day exposure threshold being breached.

05

Implications & Next Steps

If resolved

Approval of Mersey Gateway claim (+£31k), Pennine variation (+£18k) and reversal of disputed FM deductions (+£8k) would lift portfolio margin to ~21.8%, within 0.2pp of target. Resolving the two largest WIP blockers would release ~£211k into the invoicing pipeline.

If unresolved

Without these actions, margin will likely fall back below 21% in May due to continuing prelim exposure on Cathedral Quarter and escalating WIP ageing. The Riverside FM contract, at 14.8% margin, is on track to miss its year-end target by more than 7pp if the deductions dispute and application format issues are not resolved.

Key dates

9 May — Commercial Director to approve Mersey Gateway claim for resubmission. 15 May — Client deadline for Mersey Gateway re-measure. 23 May — Standardised FM application template to be produced. 30 May — Next monthly review.