Friday, June 21, 2024

Infrastructure set to outstrip building work at Keltbray for first time as firm returns to black

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Turnover from its infrastructure business is set to account for more than half of Keltbray’s income for the first time in its near 50-year history when the firm next files its annual accounts.

Keltbray has been branching out from its core London commercial roots in recent years and has moved into areas such as roads, rail and energy and renewables.

The firm, which was set up in 1976, is one of three working on dualling the remaining parts of the A66 in northern England while it is carrying out work on several HS2 contracts including shafts for the Align joint venture which includes Sir Robert McAlpine.

Income in the first six months of its new financial year show turnover from infrastructure was £180m with building income coming in at £150m.

In its latest annual report and accounts, now filed at Companies House, the firm improved revenue by one third to £528m in the year to October 2022. Building accounted for £304m of income while infrastructure posted a turnover of £215m.

But Keltbray chief executive Darren James said he expected infrastructure to be its biggest market when it files its 2023 numbers.

He said that increasing the diversity of the business had helped it weather the economic storms of the past couple of years which have included the pandemic and the war in Ukraine.

“In highways and rail, there is plenty of potential to grow,” he added. “The reason why we have a diverse portfolio is that markets are cyclical.”

He said the firm was not exposed to the decision to pause work on HS2 at Euston and north of Birmingham but echoed the rollcall of criticism around the move.

“If they pause if for two years, they delay it by three and it costs them hundreds of millions of pounds as a consequence,” he said.

The firm, which is carrying out substructure work on Mace’s Justice Quarter scheme on Fleet Street in the City of London, said it spent £950,000 on legal bills which related to the investigation by the Competition and Markets Authority into bid-rigging in the demolition sector.

Keltbray was fined £16m earlier this year for its role in the scandal and is contesting the fine. Its appeal has been submitted with James expecting a decision next summer.

James said finding skilled labour in the wake of Brexit was still proving to be a challenge while worries around materials inflation had not gone away. “Inflation was a massive issue, it has levelled off although it’s still high,” he added.

The firm’s order book at the year-end was £526m.

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