Francis Keenan
Building envelope specialist FK Group plunged to a £5.9m pre-tax loss after a challenging year in which it was impacted by the collapse of ISG.
The Cheshire-based firm said a legal dispute with ISG and the tier one contractor’s demise had led to the loss in the year to 31 March 2024.
FK also revealed it was hit by a cyber attack after the period covered by the latest accounts.
In a note to key stakeholders this week, FK chief executive Francis Keenan said: “The insolvency of ISG compounded the losses incurred through extensive legal costs as it extinguished the expected recovery from ISG.”
In a twist to the legal battle between the two firms, FK was told in 2023 to repay ISG almost £1.8m after a technical ruling.
FK’s losses worsened compared to the previous year’s £614,354 loss.
Its construction division bore the brunt with a pre-tax deficit of £7.5m in the year to the end of March 2024, and it booked exceptional items of £5.5m related to the ISG dispute.
Group turnover fell year-on-year by 23 per cent, from £131.4m to £100.6m, while in the firm’s construction arm it halved to £30m.
FK improved its liquidity, though, as cash at hand rose from £828,000 to £5.4m.
Its bank overdraft repayable within 12 months was reduced from £5.7m to £2.2m.
There were no long-term repayable overdrafts or loans, and the firm did not pay out a dividend.
Group-wide headcount dropped slightly from a monthly average of 172 employees to 164.
FK’s annual wage bill also fell from £10.1m to £10m.
Its accounts revealed that it suffered a cyber attack in September 2024. The firm said while no data was extracted from its systems, the group’s “historically held data” was compromised.
However, the contractor said it was able to trade with “minimal disruption” as it had migrated to a new system last April. The incident was reported to the Information Commissioner’s Office, which said no further action was needed, FK said.
FK, which ranked third in the CN Specialists Index for envelope contractors last year, reported a better performance in its facades and facade remediation divisions.
These businesses “delivered improvements to both profitability and liquidity in the period while the slowdown and increased competitive nature of the industrial and logistics sector has resulted in an overall loss for the group”, it said.
The facades business recorded a doubling of pre-tax profit to £1.2m in its 2023/24 financial year, despite turnover dropping slightly to £57.2m.
FK Resolve, its remediation arm, also saw its profit double to £1.2m after its revenue rose to £13.4m.
Looking ahead, Keenan said the firm foresees opportunities this year and in 2026, with a 96 per cent secured order book to 31 March.
He added: “Our current order book stands at over £200m and with the continued growth in our core markets we are excited at the prospect of 2025 and beyond.”
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James Wilmore