Revenue also slumps as contract awards are held up

Ardmore has recorded a pre-tax loss of £10.8m which it blamed on supply chain failures, delayed contract awards and four problem jobs.

In its accounts to the year 30 September 2023, the London and South-east-focused contractor reported its first loss for seven years.

Turnover was down to £403m, compared with the previous year’s £435m. Although this represents the second highest level of activity in the firm’s history, it fell well short of the £448m target set by its board.

Hornsey Town Hall Broadway

Ardmore’s Hornsey Town Hall scheme was due to finish in 2021

This year’s £10.8m loss follows 2022’s £5.1m profit, with cash down at £40m from £56m in 2022.

Ardmore’s schemes include the Whiteley’s Shopping Centre redevelopment in west London, being built by Laing O’Rourke and where it has been delayed by problems with the glazing, and the regeneration of Hornsey Town Hall in Crouch End, north London, which is running around two years behind schedule. Awarded in 2019, the job was originally supposed to finish in 2021.

Managing director Patrick Byrne blamed the loss on the rising cost of materials and labour and working with fixed-price jobs.

“The rising cost of materials and labour have ravaged all parts of the construction supply chain on fixed price contracts resulting in many corporate failures,” Byrne wrote in the accounts.

He described “difficulties building momentum on four key jobs and delayed contract awards” as contributing to the shortfall.

“While inflation has eroded margins across all jobs, the supply chain failures have heavily impacted the margins on three key projects,” he said.

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And the firm said high-profile collapses last year had spooked the market. “The failure of major UK contractors has alarmed the supply chain, credit market and customers alike. The bond market has also become much more cautious because of these failures.”

Byrne also said two remaining “problem jobs” should be completed within the first quarter of its next financial year.

This year’s accounts mention recent contract wins totalling £530m and say the firm’s order book of construction suggest achieving £400m in 2024 is likely.