JRL begins strategic review of business after firm racks up third successive set of losses

JRL has begun a strategic review of the business with its new co-owner after racking up its third successive set of losses to bring cumulative losses over the period to more than £130m.

The company posted pre-tax losses of £47m in 2022, followed by a further £36m of red ink in 2023.

In its latest accounts for the 16 months to April 2025, the firm made a pre-tax loss of £49m to bring the total amount over the period to £132m.

In a statement, chairman John Reddington said: “The last few years have been amongst the most challenging the Group has faced in its 30 year history.

“The construction industry has been operating against a backdrop of prolonged cost inflation in labour and materials, tighter credit conditions and fixed price commitments that, in many cases, have translated directly into losses.

“These pressures, together with a small number of under-performing contracts, are reflected in the Group’s financial results for 2022, 2023 and the period to 30 April 2025. We have reviewed these outcomes in detail.

“A comprehensive contract by contract review identified a number of historic issues which had already begun to impact the 2022 and 2023 results and led to restatement of the 2022 financial statements. That work has been difficult but necessary. It has given the Board much greater visibility over risk, strengthened our controls and ensured that the balance sheet now more fully reflects the realities of our project portfolio.”

Last April, JRL formally inked the deal with Malaysian conglomerate IJM Corporation which saw the latter take a 50% stake in the business for £50m while JRL’s financial period was extended by four months to take into account of the deal.

JRL added: “Alongside selective property disposals and disciplined capital allocation, this [deal] has allowed us to reduce net debt by over £32m and to cut property related borrowings by around half. We were pleased to secure this new equity from IJM, who have joined us as a long-term investor and strategic partner.”

JRL said the pair had begun “a comprehensive end to end review of the business to identify any underperforming units”.

It added: “This will be a multi-year, phased review, starting with a detailed assessment of overheads, management reporting, operating centres, gross margins and our off site manufacturing platform, including how these assets can better support programme certainty for our clients.

“In parallel, and in conjunction with IJM, we are undertaking a broader business model review, reassessing fixed price risk in light of recent inflationary experience and considering where activities or costs could be more appropriately managed externally rather than within the Group.”

JRL, whose group of 14 companies include main contractor Midgard, concrete frame business J Reddington and London Tower Crane Hire, added that it would “rigorously challenge all aspects of [its] in-house delivery [model]”.

Midgard is its biggest business with the wider group’s turnover for the period hitting £785m, the monthly equivalent of £49m for the 16 month period compared to £825m in 2023 and a monthly equivalent of £69m.

Reddington said the “worst effects of the recent inflationary spike are now largely behind the business” and added the firm’s order book had hit £2bn for the first time in its history.

He said: “With a stronger balance sheet, improving trading momentum and the support of our strategic partner IJM, we are looking forward to returning to profitability in 2026 and onwards.”

Reddington said the deal with IJM has seen net assets rise to £113m at the end of April 2025, compared with £101m at the end of 2023.

Listed on Bursa Malaysia, the country’s stock exchange, IJM was set up in 1983 and specialises in construction, property development, materials and infrastructure concessions.

In the year to March 2025, IJM increased turnover by 7% to RM6.3bn (£1.16bn) but pre-tax profit was down 18% to RM791 (£147m).

In its latest annual report, IJM said: “Our investment in JRL Group strengthens our ability to take on technically challenging, engineering-led building projects. These capabilities are critical for our London property ventures.”