JRL Group has sunk further into the red after inflation took its toll, according to the firm’s latest accounts.
The contractor’s chairman John Reddington said JRL had launched a strategic review of the business amid the “stubborn and persistent effects of inflation” in the 16 months to 30 April 2025.
In his strategic report with the accounts, Reddington added he was “confident” that the worst effects of the recent spike in inflation were now “behind us”.
JRL – the 28th biggest contractor in the UK according to last year’s CN100 index – recorded a pre-tax loss of £48.8m in its newly released accounts, compared with £35.7m in the previous 12-month period.
The latest loss, which was slightly worse than the £47.5m deficit it posted in 2022, resulted in a -6.2 per cent profit margin.
Reddington said higher wage costs, rising material prices and a tight specialist labour market had “increased the cost to complete a number of [JRL] projects, particularly those secured on fixed-price terms”.
He added: “The past few years have been among the most challenging the group has faced in its 30-year history.”
JRL’s turnover also took a hit, falling from £826.1m to £784.7m despite the elongated reporting period, although cash at hand rose from £81.7m to £99.3m.
Within the group, revenue at JRL’s main contractor business Midgard fell from £612.4m to £579.6m.
Midgard’s pre-tax loss also worsened, from £10m to £15.4m.
The wider JRL Group also includes concrete frame, demolition, scaffolding and groundworks businesses.
Reddington pointed to a “small number of underperforming contracts” that further worsened JRL’s bottom line.
JRL director Kevin Keegan said he was “satisfied” the firm had absorbed all those legacy costs in the period, following a “detailed contract-by-contract review”.
Reddington also referred to the 50 per cent acquisition of JRL by Malaysian conglomerate IJM Corporation Berhad last year, which raised £50m.
That deal allowed JRL to reduce its net debt by more than £32m and cut its property-related borrowings by half, he said.
JRL launched a comprehensive, multi-year strategic review of the business during the period to identify any underperforming units, Reddington said, with plans to change the group’s operating model.
It also launched a broader business model review, assessing the risk of fixed-price contracts following the impact of inflation, and considering “where activities or costs could be more appropriately managed externally rather than within the group”.
The latest accounts showed that short-term repayable bank loan and overdraft debt rose from £57m to £83.7m, while loans repayable after 12 months fell from £51.7m to £19.3m.
No dividends were paid out.
JRL Group’s average monthly headcount decreased from 2,281 to 2,136 employees, but its annual wage bill rose by 28 per cent from £112.7m to £143.7m.
Reddington said JRL was now in “much better shape” following the recapitalisation and some of its other actions.
He added that the contractor now has a strong and well diversified order book, a better risk framework, reduced net debt and “a clear strategy focused on disciplined growth, operational excellence and sustainable outcomes”.
“The next phase for JRL will be about continuing to translate our scale and integrated model into consistent, sustainable profitability while maintaining safe and reliable delivery for our clients,” Reddington said.
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Joshua Stein