JRL Group businesses Midgard and J Reddington Ltd have each posted a pre-tax loss in their latest annual accounts filed with Companies House.
Midgard operates as the main contracting division within JRL. In its review of 2023, directors said the firm “expanded its client base and increased the scale and scope of activities”.
This was reflected in revenue growth of 14.2 per cent in the 2023 calendar year, reaching £612.4m compared with a restated figure of £536.3m for 2022.
But Midgard’s pre-tax profit tumbled from £8.6m in 2022 to a £10m loss the following year.
Directors attributed this to “rising raw material and labour costs on fixed-price contracts”. They also cited “several [unnamed] underperforming contracts, which led to notable increases in the estimated total costs required to complete these projects”.
However, the directors said Midgard’s performance in the past two years should be treated as “anomalies, not reflective of the long-term trajectory of the business”.
They added: “With overall levels of activity expected to rise further on the back of a strong order book, the directors look forward with confidence.”
This is driven by a combination of new contract wins and a “strong secured order book”, the accounts said.
Ongoing projects include high-rise developments in London, such as the £400m Thames City scheme and the Ferry Island multi-storey residential scheme (pictured).
Midgard’s cash at bank decreased to £34.6m from £48.7m in 2022.
The firm held no bank loans by the end of 2023, and no dividends were paid out compared with £2m the year before.
The firm employed a monthly average of 229 staff in 2023 compared with 210 the previous year, and its annual wage bill rose from £17.4m to £18.6m.
Sister company J Reddington also ended 2023 in the red. But the groundworks and concrete frame specialist reduced its pre-tax loss to £746,000, compared with £8.2m in 2022.
The firm’s latest accounts cited “cost inflationary pressures” as the reason for its continued loss.
Directors added that J Reddington “has been successful in securing new contracts”, although turnover fell from £396m to £353.1m.
J Reddington was ranked as the top concrete firm in the most recent CN Specialists Index.
The firm’s latest results showed that its short-term bank debt was reduced from £9.5m to £3.9m.
Directors said its cash balance was “healthy”, although it fell from £20.3m to £14m.
No dividends were paid out.
The firm did not directly employ any site labour in 2023 (down from 30 the previous year), with a total average monthly headcount of 315.
It paid £14.6m in wages compared with £12.6m in 2022.
Midgard and J Reddington are among the 14 firms operating within JRL Group, which was ranked 27th in the CN100 2024 table of top contractors.
The most recent group accounts for the 2023 calendar year, released last October, showed an overall pre-tax loss of £35.7m from turnover of £826m.
The following month, it emerged that JRL had agreed to sell a 50 per cent stake in the business to Malaysia-based conglomerate IJM Corporation for £50m.
Midgard’s accounts noted the deal as a post-balance sheet event, adding that it expected the sale to be completed this year.
“This strategic investment furthers IJM’s expansion into the United Kingdom and strengthens its core construction capabilities,” IJM announced in a 25 November statement.
Midgard was the main contractor for IJM Land’s Royal Mint Gardens Phase 1 development, which was completed in 2019. Midgard is also the main contractor for Phase 2, which includes a 463-room hotel and 79 residential units.
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Ben Vogel