Buoyant London market helps Keltbray turnover jump through £200m barrier
Turnover at Keltbray Group has soared 50% to £217m on the back of a large haul of work and renewed development activity in London.
The engineering, construction and demolition specialist saw turnover jump £72.2m to £216.9m in the year to October 2014, up from £144.7m, on the back of a strong performance in its demolition division. Keltbray’s pre-tax profit jumped almost four-fold to £7.9m, up from £2.6m.
The demolition and civils division increased turnover by 65.6% to £158.4m, while the piling and asbestos removal businesses more than doubled in size.
The majority of Keltbray’s major projects during the year were in the capital with significant wins including the demolition at London Bridge Station for Costain and Network Rail (pictured), the demolition of Chelsea Barracks, asbestos removal, demolition and temporary works at Earls Court, and structural demolition of Angel Court for Stanhope and groundworks at London Wall Place for Brookfield.
Keltbray has said that it does not expect its rail electrification businesses 2015 turnover will be “significantly impacted” by the “pause in some electrification projects” announced by Secretary of State for Transport Patrick McLoughlin and sees a turnover in line with 2014 “if the spend on major projects is as programmed”.
However, the firm added that while its other businesses turnover increased in 2014, its Rail E&C did not due to “a failure to maintain turnover in new market areas and a reduction in Network Rail spend in the changeover from CP4 to CP5”.
Keltbray said the group has a “satisfactory workload” and that the market in the medium term appears favourable, but sees risks from “increasing labour and material costs” and “obtaining the appropriate experienced and qualified staff to carry out the workload and the financial stability of our supply chain”
To counter the risk of increasing prices the group said it is including an assessment of increased costs its tenders and has strengthened its HR and recruitment resource.
Keltbray said that the improved market conditions of 2013 in its demolition and civils business continued in 2014, increasing its turnover to £158.4m for the year compared to £95.7m for 2013.
It added that its piling and asbestos removal businesses both increased by over 100%. However “gross margins in the main D&C business were down on 2013, which reflects fewer but more profitable projects in 2013, some loss makers in 2014 and an increase in labour and materials costs as the market improves”.
Keltbray chief executive Brendan Kerr said: “2014 saw a continued strengthening of our performance. This improvement has been driven by the demolition and civil engineering business stream, where experienced project teams supported by our in-house design capability, provide innovative solutions and delivery on complex challengin g projects such as Earls Court, Bradwell Power Station, Angel Court and London Bridge stations.
“Our piling and asbestos businesses are now established as major players in their sectors and allow us to offer an integrated service to our clients which cannot be matched in the UK market. As part of our works at Chelsea Barracks, the piling business was awarded a £10 million contract for secant piling that was successfully completed in a tight timeframe of 34 weeks.
“The asbestos removal business won a large framework contract with Royal Mail covering all their UK properties and a considerable project on the major development at Battersea Power Station. This is likely to be succeeded by further contract awards for our other demolition and civil engineering businesses.”