Keltbray’s rail business is expected to ‘outstrip’ its demolition and civil operations in the future after the firm consolidated its position in the sector last year, its finance director told CN.
John Keehan revealed his forecast as Keltbray reported a 24 per cent rise in group turnover from £87m to £108m in the year to 31 October 2011, with pre tax profit sliding from £210k to £39k as Keltbray incurred costs, including staff investment and tender costs in rail.
Demolition and civils operations at Keltbray – which has worked on the Olympic Stadium for Sir Robert McAlpine, The Shard for Mace and a string of high profile commercial projects in London – grew by 20 per cent and still represented between 70-80 per cent of revenue last year, said Mr Keehan.
He expects group revenue to increase by 10 per cent in 2012 and then rise to £140m in 2013.
Rail revenue – which covers engineering, electrification, track, plant hire and signalling - increased by 67 per cent in 2011, and currently represents one fifth of group revenue.
Mr Keehan said rail is set to represent a third by the end of 2012 after Keltbray secured its biggest ever contract - a £46m deal to provide Power Supply Upgrade for Network Rail on the West Coast Main Line.
Referring to Network Rail’s plans for £9.4bn of investment, Mr Keehan said there is “every expectation the rail business will outstrip the D&C business going forward”.
“Fifty per cent of that (funding) is going to be electrification, so for us, the investment is going to be worthwhile.”
Keltbray’s rail division - where it is focusing largely on overhead line electrification work - saw a reorganisation after the acquisition of Aspire Rail Consultants just over 18 months ago.
The group’s overall return was also impacted by a loss-making recycling depot in Dagenham, which it disposed of at the end of 2011, said Mr Keehan.
The D&C saw a major success through the Doosan Keltbray Consortium, which was awarded several deplanting and asbestos removal contracts at Bradwell Power Station under the five-year Magnox demolition framework contract, which operates across 10 nuclear sites throughout the country.
“In D&C we do see an increase in turnover, but it remains a tough market, you have got to work hard to prequalify,” said Mr Keehan.
Keltbray Golf Environmental – created after the acquisition of Golf Environmental and specialising in the design and construction of golf courses, along with restoration of landfill and quarry sites - has also extended its recycling and material management services, the firm said.
Group chief executive Brendan Kerr said: “From being a demolition and civils focused business in the South-east; Keltbray is emerging into a turnkey specialist business, which provides integrated services to meet the needs of diverse and complex contracts in the areas of demolition and civil engineering, rail and environmental materials management nationwide.”
Operating profit rose to £420,000, from £90,000 in 2011. Employee numbers increased at the firm in 2011, and are now at around 800.