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JRL's margin hits 7% with turnover up by a third

JRL Group has posted a pre-tax margin of 7 per cent after filing its highest turnover on record in 2017.

Accounts for the year to 31 December 2017 revealed the group, which includes concrete specialist J Reddington, made a £27.1m pre-tax profit on turnover of £388.3m.

Both figures were up sharply from the previous year, which saw the company make a £16.2m pre-tax profit on revenue of £288.6m.

JRL chief executive Kevin Keegan told Construction News the 7 per cent margin for 2017 was driven primarily by the company’s specialist contracting operations.

However, the group was also recording high margins as a main contractor by doing more work itself rather than subcontracting, he added.

“There’s more risk, but there’s also more opportunity when you’re doing work yourself,” Mr Keegan said.

The 35 per cent year-on-year rise in turnover during 2017 was largely attributed to the group taking on bigger contracts.

JRL’s main contractor business, Midgard, is now looking at jobs up to £200m and is currently working on two contracts valued at around £180m each.

Midgard took over on the S2 office in King’s Cross earlier this year, which will be occupied by Google, after original contractor Carillion collapsed in January.

Concrete structures business J Reddington meanwhile is working on contracts worth up to £65m, the group reported.

JRL chairman John Reddington said in the company’s accounts that “managing growth represents a challenge in itself”.

However, he pointed to the group’s cash reserves of £30.9m, as well as growth in net assets from £27.8m in 2016 to £45.9m to 2017, as evidence that the firm was managing its growth sensibly.

Net debt climbed from £5.3m in 2016 to £20.1m in 2017, however, which the company said was mainly a result of buying new equipment for its plant hire business. 

Mr Keegan said the 2017 performance would not be a one-off for JRL. “I think we’d expect to continue that [margin],” he said.

He added that, while the firm was not specifically targeting further revenue growth, it expected turnover to increase again in 2018 to around £500m.

This would be driven by larger contracts for Midgard, but around £50m of 2018’s revenue is expected to come from McMullen Facades, Mr Keegan said.

JRL bought the McMullen business in November last year when its former owner Lakesmere went into administration.

The group said its acquisition allowed it to offer combined structure and envelope packages to clients, which the company said it could start delivering in 2019.

McMullen Facades will also enable the company to take on more work in the private rented sector and wider high-rise market, which Mr Keegan cited as a key growth area in the short term.

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