M&E specialist sees profit more than double but margin remains ‘modest’

One of the UK’s biggest mechanical and electrical (M&E) specialists has more than doubled its annual profit despite a drop in revenue and the sector still facing “significant cost pressures”.

London-based Gratte Brothers Group posted a pre-tax profit of £4.4m in the year to the end of March 2025, up from £1.9m the prior year.

Last year the family-owned group’s bottom line was hit by a £2.5m provision, mainly connected to  an undisclosed long-term project.

However, the firm’s profit in its most recent full-year was helped by a 10 per cent year-on-year reduction in raw materials and consumables costs to £192.6m.

In its latest accounts ending 31 March 2025, the group recorded an 8 per cent drop in turnover year-on-year to £242.5m.

Gratte Brothers, which ranked 10th for M&E in the latest CN Specialists Index, said the decline in revenue was “primarily due to the phasing of projects”.

It added: “While the headline inflation rate has reduced during the year and post year-end, the construction market still faces significant cost pressures, linked to labour skills shortage and material supplies.”

The relatively small profit compared to revenue meant the group recorded a pre-tax margin of just 1.8 per cent. However, this was an improvement on last year’s figure of 0.7 per cent.

The firm, which announced last month it had opened an office in Manchester (pictured), said its “modest” margin “reflects the challenging nature of the industry”.

Gratte Brothers’ M&E division accounted for the bulk of revenue as the unit recorded turnover of £199.3m, although this was down on the previous year’s £226.7m.

On an operating basis, profit in the division rose from £2.6m to £3.1m.

The group’s other businesses include specialist security systems services, commercial catering installation and maintenance, and building services maintenance.

Staff numbers at the group remained the same at 484, although its wages bill rose slightly from £33m to £34.5m, the accounts showed.

Gratte Brothers reported an increase in its cash position to £52.1m, up from £39.7m the year before. It paid a dividend of £100,000, the same amount as the prior year.

Looking ahead, the firm said it has a “strong order book and pipeline of contracts with reputable partners in the medium term”.

It added: “The business views the future positively, despite ongoing global economic, political and financial uncertainties, and its focus continues to be achieving sustainable and profitable revenue growth with clients who it can build long-term partnerships with.”

Next year will mark 80 years since the firm was first established by brothers Derek and André Gratte.