Eye-watering materials rises see firm rack up near £7m loss

One of the country’s best-known subcontractors has said it is looking at inserting fluctuation clauses into contracts and asking clients to share their fair share of risk after it was caught out by price rises on fixed-price contracts which sent it tumbling into the red last year.

Concrete and piling specialist Morrisroe, whose current jobs include Multiplex’s Elephant & Castle town centre revamp and Sir Robert McAlpine’s One Broadgate scheme, racked up a £6.9m pe-tax loss in the year to October 2022 from a £3.5m profit last time.

It said rebar rose 130% during the period while concrete was up 26% and plywood by a further 25%. It added that it was also having to pay more for labour caused by skills shortages.


Morrisroe’s sector including concrete, joinery, demolition and piling

In results filed at Companies House, the firm said: “In view of the considerable price volatility experienced in the period we are now including negotiated fluctuation clauses in our contracts and/or seeking appropriate risk-sharing arrangements with clients.”

Chief executive Brian Morrisroe said it expected fixed-price deals signed in 2021 and 2022 to be off its books this year and next.

The firm, which recently rebranded the Cantillon demolition business it bought three years ago, said turnover was flat at £204m.

Morrisroe said turnover was expected to be £225m in the current year with its order booking amounting to £388m, although it warned residential schemes were being hit by viability issues such as having to deal with building safety legislation and rules on second staircases while some jobs were being caught up in planning snarl-ups.