Firm sees 拢13m pre-tax profit turn into 拢47m loss after figures adjusted to take into account of rising materials and labour costs
JRL chairman John Reddington has admitted the past two years have been among the most challenging in its 27 year history after restating its 2022 accounts resulted in a 拢47m loss with the owner of Midgard staying firmly in the red last year with a 拢36m loss.
The company had posted a pre-tax profit of 拢13m when it filed its 2022 accounts in July last year.
But in its 2023 accounts, JRL said that the cost of materials and labour on fixed-price contracts 鈥渉ave led to notable increases in the estimated total costs require to complete these projects鈥�.
It added: 鈥淭he operating performance of the affected contracts reported in the finance statements [for 2022] was materially misstated.鈥� It said the overall impact of the adjustments was to reduce equity by 拢47.5m to 拢94m.
The firm, whose group of 14 companies also include concrete frame business J Reddington and London Tower Crane Hire, said that pre-tax losses last year had narrowed 鈥� but were still 拢36m.
Revenue at the business, which employs 2,300 people, was up 8.5% to 拢826m. Cash at the bank and in hand fell from 拢117m to 拢82m, the accounts added.
In a statement, Reddington said: 鈥淟ast year was one of the most challenging periods in in JRL Group鈥檚 27 years trading.鈥�
He added: 鈥淭he construction industry faced significant disruptions due to economic instability, material shortages, record inflation and unexpected project delays.鈥�
But he added the firm had turned a corner. 鈥淭he directors view the financial outcomes in 2022 and 2023 as anomalies, not reflective of the long-term trajectory of the business.
鈥淥ur pipeline is robust, with several major contracts that were previously delayed now coming to fruition. We anticipate a more stable economic environment which will alleviate some of the pressures we experienced in 2023.鈥�
It added that it had turned in a 鈥渟trong performance鈥� in the first half of this year, with pre-tax profit up on forecasts, and that its book stood at 拢1.5bn.
It said that the amount it had set aside for remedial works at the end of 2023 was 拢10.5m while the amount it set aside for loss-making contract provisions at the end of last year was 拢6m, having stood at 拢16m at the beginning of 2023.
The firm added that in April this year it sold an investment property for 拢12m which saw it book a net cash inflow of 拢8.5m.
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