By Keith Cooper
The leading concrete specialists improved their aggregate financial performance, although inflation hit profits and margins.
Three of the top 10 firms posted losses, in contrast with the previous year, which saw only one firm in the red. Third-placed PJ Carey’s £48.1m deficit was the biggest by far, followed by AJ Morrisroe & Sons (which falls four places to eighth) and table-topping J Reddington, which posted pre-tax losses of £3.9m and £1.6m respectively.
However, aggregate pre-tax gains for the firms in this year’s index have increased by 21 per cent to £33.5m compared with the 2022 table, driven largely by second-placed newcomer FP McCann’s £38.4m profit.
Some established firms posted big jumps in pre-tax profits this year, albeit from some low bases. Ground Construction posted the largest rise from £120,000 to £2.6m, while Expanded posted a six-fold boost from £1.3m to £8.2m. Oliver Connell & Son (a new entrant in fifth place) more than tripled its pre-tax profit from £3.0m to £10.1m.
Despite inflationary pressures, the median margin rose from 1.1 per cent to 3.9 per cent. However, loss-making PJ Carey’s margin fell from 0.9 per cent to -17.5 per cent.
Meanwhile, revenue rose in eight of the firms and by an aggregate £205.9m to £1.82bn.
Four firms reported across-the-board rises in revenue, pre-tax profits and margins: Oliver Connell, Ground Construction, MPB Structures, and CJ O’Shea.
PJ Carey’s latest accounts describe a “turbulent year”, adding: “Decisive actions have been taken and we have worked hard on protecting ourselves from continued inflationary pressures by working proactively with clients and the supply chain.”
AJ Morrisroe & Sons describes the trading period to 31 October 2022 as “plagued” by materials price inflation of up to 200 per cent due to the Russia-Ukraine war. It says it has protected its exposure to inflation by pre-purchasing materials and amending its contracts. “We are now including negotiated fluctuation clauses in our contracts and/or seeking appropriate risk-sharing arrangements with clients,” it adds.
Oliver Connell managing director James Connell puts its “very good year” down to diversified operations. “Our projects in Heathrow Airport and the Cambridge Biomedical market represent this new growth, and have enabled new opportunities in the renewable energy and rail industries of which we are optimistic,” he adds.
The firm was hit hard by inflation in 2021 but its impact was lessened because it had been finishing its larger jobs rather than starting them. “Labour/inflation is still an issue,” Connell remarks. “However, steel has dropped in price significantly of late and concrete seems to be holding stable or dropping in price in some areas.”
He describes current market conditions as “tough”, adding: “We are seeing a trend in some sectors where the market has become extremely competitive. With that in mind we are generally targeting projects in new niche markets while maintaining our current operations. Fortunately, we are cash-rich with a very strong balance sheet.”
|2022||2021||Change||Company||Latest revenue (£m)||Previous revenue (£m)||Change (£m)||Latest pre-tax profit (£m)||Previous pre-tax profit (£m)||Latest pre-tax margin (%)||Previous pre-tax margin (%)||Financial Year Ending|
|3||2||-1||P J Carey||274.26||239.59||34.67||-48.05||2.07||-17.5||0.9||30/09/2022|
|5||N/A||NEW||Oliver Connell & Son||143.64||116.69||26.95||10.12||2.96||7.0||2.5||30/06/2023|
|8||4||-4||AJ Morrisroe & Sons||106.58||141.58||-35.00||-3.85||1.82||-3.6||1.3||31/10/2022|