Group increased profit thanks to booming land development business
Careys said a combination of fixed price contracts and rampant inflation helped blow a £35m hole at its construction division last year.
Around three-quarters of the group’s business is through contracting, which also includes drylining arm BDL, but soaring costs, delays to jobs starting and problems getting hold of labour and materials following the war in Ukraine all helped send the division into the red.
Group chief executive Jason Carey admitted: “A turbulent year resulted in a loss after tax of £35m for the construction side of the business, caused by a raft of unprecedented challenges faced throughout the industry from inflationary pressures and the war in Ukraine to the energy and cost of living crises, as well as a combination of project delays, poor performing projects and contracts taken on with too much risk.”
But the firm said contracting in the current year was forecast to return to the black as problem jobs were cleared and inflation spikes settled down.
In accounts filed at Companies House by Careys parent Araglin Holdings, the firm posted a pre-tax profit of £43m in the year to September 2022, up from £16m last time.
It said this was down to its booming land development business and waste management arm Seneca.
Just over £800,000 of its profit also came from Scudder, the demolition business discontinued by the firm in the wake of the bid-rigging probe in the sector which saw the Competition and Markets Authority dish out £60m in fines to 10 firms earlier this year. Careys was handed an £8.2m penalty for its role in the scandal which the firm said it had paid in the spring.
Careys has previously said the firm has tightened up its governance structure in the wake of the investigation and that the management team at the centre of the scandal is no longer at the business.
Careys said its current order book was over £600m with the firm reaping the benefits of moving into energy from waste schemes where it is building giant concrete storage bunkers for joint venture client HZI on four schemes including Leeds and London.
The firm said it plans to spend £25m on plant and technology in the coming three years, having shelled out £35m on a new warehouse and office complex in Buckinghamshire for its plant and fleet business.
Careys, which has net assets of £157m including £73m of cash, said turnover last year was up 6% to £366m. It expects income this year to be around £400m.
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