J&D Pierce sees profit plunge after ‘difficult year’

Scottish structural steelwork contractor J&D Pierce has posted a 94 per cent slump in operating profit from £12.6m to £800,000, on turnover that was 5 per cent lower in the year to the end of December 2024.

In its accounts, the company said it was apparent from the outset that 2024 was going to be a “difficult year”, because by January one of its largest contracts had already been cancelled and several others had been delayed and even indefinitely postponed.

“This left significant gaps in our production with only limited low margin work available within the marketplace to fill the slots,” J&D Pierce said.

“Unfortunately, this looked set to continue throughout the rest of the year which turned out to be the case.”

The company’s cash position fell to £28.9m by the end of 2024, from £39.9m at the end of the previous year, while its pre-tax profit fell 82.6 per cent to £2.3m from £13.3m in the 12 months to the end of 2023.

J&D Pierce’s operating margin also took a battering – down from 12 per cent in 2023 to below 1 per cent last year, as the company battled inflation-driven rises in steel prices, costs of coatings and energy. All of which weighed heavily on the sector as a whole and saw higher-margin jobs dry up.

“The main operational factors concerning the business are delays in commencing projects,” managing director Derek Pierce said in the company’s accounts.

“While current demand for tenders remains high, delays to existing projects remains an ongoing risk. However, these are closely managed and project phasing is constantly reviewed to optimise resource efficiency.”

Given the slowing business environment, J&D Pierce found itself in, the company decided to review its systems, procedures and processes, which resulted in certain inefficiencies being identified.

The firm was sixth in CN’s specialist index of top 10 steel contractors last year,

“One area that was identified as problematic within our two fabrication facilities was the bottleneck of materials waiting to be processed through the paint shop when high volumes of intumescent paint were being applied,” the company said.

“We decided to remove the problem from both factories and purchased a new standalone paint facility.”

That new facility in Bellshill, Glasgow, was refurbished with 24 new overhead cranes, new post-fabrication blasters and a 30-metre blast booth. Total investment into the site was £6.7m and it is set up to handle over 1,500 tonnes per week of primer and offsite intumescent coatings.

Moving the paint shop from Glengarnock to Bellshill enabled J&D Pierce to free up production space to allow an extra 250 tonnes of fabrication to be manufactured every week.

“Despite 2024 being a very challenging year, the company looked to the future and invested heavily in infrastructure, efficiencies and people,” Pierce said. “We are ready, stronger and more efficient for the years ahead.”

Over the period its headcount increased to 522 from 474, and its wages bill rose from £23m to £27.3m.