Tighter resi market hits concrete specialist’s bottom line

A “marked reduction of opportunities” in the residential sector contributed to lower revenue and profit at Ground Construction Holdings last year, the employee-owned firm has said.

Turnover fell 1.7 per cent from £100.1m to £98.4m year on year, while the group’s pre-tax profit dropped by a tenth to £4.4m, according to its accounts for the 12 months to 30 June 2025.

This resulted in a narrower margin of 4.4 per cent for the Hertfordshire-based company, down from 4.9 per cent in its 2024 financial year.

Directors said the introduction in 2024 of the gateway two regulatory approval process for higher-risk buildings (HRBs) – which has experienced a bottleneck – “resulted in a marked reduction of opportunities in the high-rise residential market in and around the London area, creating greater competition”.

Contracting revenue from its main trading arm, Ground Construction Ltd, fell by 3 per cent from £95.5m to £92.4m.

Ground Construction was ranked eighth in last year’s CN Specialists Index for concrete contractors.

The parent group’s cash at hand fell from £20.4m to £14.4m and its short-term repayable loan debt almost tripled from £1.4m to £4m, according to the accounts.

It held no long-term bank loans or overdrafts.

Ground Construction Holdings has been an employee-owned trust (EOT) since 2021. Founder Trevor Diviney sold his shares to facilitate the transition but has remained involved as executive chairman.

The latest accounts showed that £5m in surplus cash or assets was transferred into the EOT during the year to pay Diviney, in line with the terms of the transition.

The firm’s wage bill was stable, rising just £27,000 to reach £7.7m in the year, despite the average monthly headcount increasing from 72 to 93 employees.

Directors envisaged “a lot more opportunity going forward for the business”, as more residential HRBs obtain gateway two approval from the Building Safety Regulator.