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Brendan Kerr says Keltbray鈥檚 strategy was always to offload its infrastructure business. 鈥淔irst and foremost, it was set up to sell 鈥� that was always my plan.鈥�

The infrastructure business began in 2009 with the acquisition of Gamble Rail, gradually adding bits, such as the Aspire overhead line contractor, in 2010, launching an energy arm three years later and buying the highways division of collapsed building and civils firm NMCN three years ago. By the time it did sell infrastructure to private equity in August, the company had a turnover of 拢378m, according to its latest annual report, and employed 1,100 people.

Infrastructure earnings were around 拢20m and Keltbray鈥檚 owner says he sold the firm for nine times that. Simple maths suggests, then, a price of 拢180m. Kerr won鈥檛 confirm the number but admits that it鈥檚 鈥渨ell north of 拢100m鈥�.

The deal with EMK Capital, based in London鈥檚 Hanover Square, saw Keltbray 鈥� which was set up in the 1970s and which Kerr has been running since 2003 鈥� go back to focusing on the built environment. This means its London commercial work, as well as sectors such as data centres, battery plants, energy schemes such as nuclear, and jobs like HS2. 鈥淲e won鈥檛 be doing road, rail or power.鈥�

Its retained business includes demolition, sub and super structures. 鈥淚鈥檓 still a civil engineer,鈥� Kerr is quick to point out.

He has no stake in the offloaded business, which is run by former Keltbray chief executive Darren James who joined just before covid after three decades at Costain.

The new company is expected to change its name by Christmas and Kerr adds that the pair have a non-compete agreement in place.

The initial plan was to keep James and sell off infrastructure, but 鈥渁 few honest conversations鈥� during covid meant that James would leave with infrastructure once it was sold. 鈥淒arren was always going to be infrastructure, inside out, back to front. Darren was up for that and saw [the sale] as a good opportunity for him as well.鈥�

The decision to sell up, Kerr says, was made a couple of years ago with the firm hiring the Royal Bank of Canada (RBC) to handle the disposal and find a buyer.

It was either going to be private equity or a trade sale, but RBC said the business would fetch more if it was sold to private equity. More than 30 firms expressed interest, which was then whittled down to 20, then a dozen, halved,  and then best and final offers were made by two firms.

 If you are just purely dependent on the London market, you鈥檇 be out of business

What Kerr is left with is a built environment business which, according to its last set of accounts, has a turnover of 拢311m and around 800 staff. He says the plan now is to grow the business back up to 拢500m, with around 1,000 employees.

He admits that the current market is facing several headwinds, such as investors delaying decisions on schemes. Like many, he laments the paucity of margins.

鈥淎 specialist contractor like us, we were always told by accountants that our margins should be 7%. Since 2019, we haven鈥檛 priced a job for more than 1.5%.鈥�

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He says that cost consultants and lawyers 鈥渉ave a lot to answer for鈥� in helping drive down profits. 鈥淭he fee bubble has taken over from the bloke with the shovel in his hand. If the industry was operating properly and normally and fairly in the past five years, there wouldn鈥檛 be all these distressed businesses.鈥�

Brexit, covid and rampant cost inflation caused by the war in Ukraine have all contributed to dwindling margins and Kerr admits that the days when London was the be all and end all are gone for him 鈥� hence the move into sectors such as data centres and battery plants.

鈥淟ondon is still a safe market but, if you are just purely dependent on the London market, you鈥檇 be out of business. I love the London market but I wouldn鈥檛 want to be solely reliant on it.鈥�

I couldn鈥檛 give it up, it鈥檚 a drug. I enjoy the challenge. I hate losing

Kerr turns 60 next August but has no plans to wind down. He sees himself continuing as executive chairman for the next decade at least and acknowledges that he is unlikely  ever to fully quit the business. 鈥淚 enjoy doing it, I鈥檓 passionate about it.鈥�

He adds: 鈥淚 see myself as incredibly active for the next 10 years. I couldn鈥檛 give it up, it鈥檚 a drug. I enjoy the challenge. I hate losing.鈥�

All this does not mean, though, that he hasn鈥檛 thought about a succession plan. Corporate governance was tightened up under James and he says that Vince Corrigan, formerly chief operating officer but now chief executive and who joined Keltbray from Sir Robert McAlpine nine years ago, will be at the business for the next few years.

Kerr had brought in headhunters over the summer to sound out replacements, but says: 鈥淰ince is 62, going on 52. We don鈥檛 see anyone out there at the moment. I see Vince here for the next two or three years.鈥�

The succession plan, he says, is likely to involve Corrigan鈥檚 long-term replacement and his two sons, Ryan and Sean, both in their 30s, who work in the business. A third son, Liam, works overseas in the hotel industry.

One thing Kerr is definite about is that the firm will not become employee-owned. 鈥淎ll [private] companies should be owned by a proper major shareholder or two or three shareholders. I鈥檓 not sure employee-owned trusts are good for the industry. Look at their track record [Buckingham and Lonsdale were EOTs at the time of their collapses]. It鈥檚 the end of the line for the owner. It鈥檚 not how I see succession planning for a family business.鈥�

Keltbray will remain in Esher, Surrey, although it is looking at moving out of its current home opposite Sandown racecourse and into smaller offices elsewhere in the town. It has a location in central London at Farringdon 鈥� its neighbour will be its former infrastructure business 鈥� and Kerr reckons that this office will be able to hold 150 staff.

By then, he hopes he will have drawn a line under its appeal against the size of the fine by the Competition and Markets Authority for its involvement in the demolition sector鈥檚 bid-rigging scandal.

Keltbray has argued that the amount of 拢16m, announced last March, is too severe and has so far spent more than 拢500,000 on legal fees. Kerr reckons it will hit seven figures by the time it is all over.

The tribunal to hear the firm鈥檚 appeal was held in the spring. He can鈥檛 talk too much about the case but a decision is due before Christmas.

There is still time left for him to show the sort of enthusiasm that keeps him going. He鈥檚 talking the weekend after the firm has poured 1,600m³ of concrete at the Salisbury Square development in London, sometimes known as the Justice Quarter on Fleet Street, which is being built by Mace.

鈥淚t鈥檚 one of the biggest pours in London in the past 20 years,鈥� Kerr marvels. 鈥淲e鈥檙e still one of the leading lights in London.鈥�