Latest annual results for the business revealed the firm fell £36m into the red last year and, after restating prior year accounts, recorded a further £47m pre-tax loss in 2022, due mainly to the McMullen Facades business, bought back in 2017.
Despite the challenging market conditions, JRL grew revenue by 8.5% to a record £826m, primarily driven by strong 14% revenue growth at Midgard, the group's main contracting division.
Chairman John Reddington said: "While last year was one of the most challenging periods in JRL group's 27 years trading, we are incredibly proud to have achieved a record year for revenue and project completions in 2023.
"The construction industry faced significant disruptions due to economic instability, material shortages, record inflation, and unexpected project delays.
"These factors combined to create a difficult environment for our business, impacting our financial performance and delaying some key projects."
The vertically integrated nature of the business with specialist services from demolition and RC frames to M&E and drylining trades, magnified the impact of materials and labour cost pressures alongside project delays.
| JLR's largest trading businesses | ||||
|---|---|---|---|---|
| Profit | Revenue | |||
| 2023 | 2022 | 2023 | 2022 | |
| Midgard | -£10m | £8.6m | £612m | £536m |
| J Reddington | -£0.7m | -£8.2m | £353m | £396m |
| McMullen Facades | -£34m | -£44m | £112m | £128m |
| Ark M&E Services | £2.2m | £3.7m | £112m | £115m |
| Thames Reinforcements | £12m | £8.6m | £84m | £99m |
| London Tower Crane Hire | £4.1m | £4.7m | £42m | £40m |
| JRL Drylining | -£3.1m | -£6.1m | £36m | £27m |
| JRL Environmental | £9k | £0.4m | £17m | £19m |
| JRL Civil Engineering | £2.8m | -£2.3m | £14m | £12m |
| *intercompany trading £781m | ||||
Following a forensic contract review, the business has drawn a line under all risks on legacy contracts.
JRL's self-delivery model has helped to de-risk the business from the impact of potential subcontractor failures going forward.
This helped JRL to build a strong order book at £1.5bn with several high-value contracts secured for the coming years, like the Brindley Drive 46-storey tower planned by developer Court Collaboration in the heart of Birmingham.
The decision to expand into Birmingham several years ago and the expected recovery in the build to rent market have set the firm up for a strong recovery in 2024.
After taking steps to boost liquidity by over £50m, JRL said it had bounced back with a strong operating margin on new work in the first six months of this year.
It is now forecasting a 2024 year-end result of around £20m profit on revenue of over £760m.
Reddington said: "Looking ahead, we are encouraged by the positive results of the measures we implemented in response to challenges. Our project pipeline is robust, with several major contracts that were previously delayed now coming to fruition.
"While 2022 and 2023 presented numerous challenges, it was also a period of transformation and resilience for our company."
Source: JRL returns to profit after two years of losses | Construction Enquirer News