A multi-million pound investment in rail and waste businessess was also responsible
The UK’s largest demolition contractor, Keltbray, has suffered an 86% drop in profits, blaming the “worst market conditions in a generation”.
Pre-tax profit dropped from £9.2m to £1.3m, while turnover also dropped by 18% to £78.5m for the year ending 31 October 2010.
John Keehan, finance director of Keltbray, admitted tough trading conditions had knocked 2-3% off margins, which he said are now at 4-5%.
But the firm said a multi-million pound investment in its rail and waste businesses was also responsible for the dip in profit.
Keehan said: “Our 2009 results reflected the tail end of some very good jobs and the fact that staff took a 10% pay cut. Last year there was a substantial investment in overheads and contract margins have come down a bit.”
Keltbray said its target is to grow its rail business so that turnover there matches its demolition business within three to four years. Its fixed assets jumped to £7.4m in 2010, from £1m in 2009, and it acquired 75% of consultant Aspire Rail last autumn.
A clampdown on overtime pay saw its wage bill fall 5% last year from £22.7m to £21.6m, despite a staff increase from 548 to 595.
The firm said that acquiring golf and land remediation specialists, Golf Environmental, will diversify the business and help it with landfill.