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John Reddington sees 41% hike in revenue

John Reddington saw a 41 per cent boost in revenue in 2011, but suffered a knock to profits on the back of problems in its piling division.

JRL Group reported revenue of £149.4m in the year to December 31 2011, up from £106m a year earlier.

Pre-tax profit fell from £2.3m to £1.8m, while group operating profits were stable at £3m, compared with £2.9m in 2010.

The group said this “reflected the downward pressure on margins across the group and poor set of results for our piling division”.

Almost half of the revenue increase came from Midgard, the main contracting division, predominantly focused on prime residential in London and the South Coast. It is on the 19-storey 240 Blackfriars Road scheme and various London projects for Berkeley’s premium subsidiary St George.

Miller Piling saw a ‘particulary poor performance’, with a number of ‘problem contracts’ and significant losses in 2011. This led to a review of operating procedures and a reorganisation of the management structure. Miller Piling is set for ‘modest profitability’ this year.

Chairman John Reddington said the group has used its reputation for ‘quality workmanship and on-time, on-budget performance’ to extend its business into “associated activities”.

“Maintaining the pace of growth in the face of unusually tough market conditions presents ongoing challenges, not least in order book performance.”

This means selling in additional services to house builder and developer clients. The firm bought UK Facades and Stairmaster in January 2011. The former remains focused on establishing market share, while the latter generated ‘reasonable’  profits.

The firm said: “Successful client delivery has enabled further expansion; the directors are committed to developing new subsidiary entities in response to proven demand, when supported by a compelling business case.”

Employee numbers rose from 241 to 298 in the year.  The contractor told CN in March that it is also working on plans to re-start manufacturing activities at Trent Concrete, which could lead to 300 jobs in Nottingham, after the pre-cast concrete firm collapsed while working on the Olympics.

J Reddington – focused on concrete structures in London and the South east - delivered ‘positively’ and expects strong 2012 results. Thames Reinforcement broke even after a tough 2010, while London Tower Crane Hire and Sales returned to profitability after a ‘disappointing’ performance a year earlier.

2011 also saw the parent company – Alloa Group – enter into a new financing agreement, which has activated an unlimited cross-guarantee, securing £6.5m in overdraft facilities and invoice discounting against all Reddington firms.

Group cash rose from £2.4m to £3.9m, as did net borrowings, while its net asset position was up £1.9m to £3.1m.

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