Malaysian conglomerate agrees deal to take 50% stake in JRL

JRL has signed a deal with a Malaysian conglomerate which will see the firm take a 50% stake in the business set up by John Reddington nearly 30 years ago.

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

In the year to March 2024, IJM had a turnover of RM5.92bn (£1.1bn) and posted a pre-tax profit of RM964m (£172m).

Building understands the pair have been speaking about taking a possible stake in JRL, based at Borehamwood in Hertfordshire, since the summer with negotiations accelerating earlier this autumn.

The value of IJM’s investment is undisclosed but it is understood its stake has been capped at 50% giving the two an equal holding in the business which last year had a turnover of more than £800m.

The firm, whose group of 14 companies includes concrete frame business J Reddington and London Tower Crane Hire, has racked up more than £80m in losses in the past couple of years. Its pre-tax losses last year narrowed from £47m in 2022 but were still £36m. Revenue at the business, which employs 2,300 people, was up 8.5% to £826m in 2023.

JRL’s income this year is set to be between £650m and £700m with the board expecting the firm to return to the black.

The Midgard owner’s order book stands at £1.7bn while IJM has signed a deal to develop out eight Network Rail sites across London which could run to an estimated 3.5 million sq ft and a gross development value of £3bn.

The pair have been working together on a residential scheme close to the Tower of London called Royal Mint Gardens for the past few years, the first phase of which was completed in 2020.

The next phase, which includes private residences and a 450 room aparthotel, has recently begun and is slated for completion in 2028.

In a statement, JRL said: “We are very pleased that IJM Corporation, our trusted long-term partner, will be joining JRL Group. IJM’s investment brings a wealth of experience and capability to the business. Together, we are well-positioned to drive sustained growth, pursue new opportunities and enhance our presence in the market.”

Reddington said the past couple of years have been among the most challenging in JRL’s history with the firm blaming the cost of materials and labour on fixed-price contracts for its losses.

In its latest accounts, filed at Companies House last month, Reddington said the business had turned a corner. “The directors view the financial outcomes in 2022 and 2023 as anomalies, not reflective of the long-term trajectory of the business.”

IJM also owns the former Shredded Wheat factory site in Welwyn Garden City which it bought last year. A planning application for the scheme, called Wheat Quarter, is due before local planners next month and will include building more than 400 houses and flats while the grade II listed grain silos will be turned into a sky bar and restaurant.