Keltbray has faced financial setbacks due to an ongoing legal dispute, but future prospects appear strong. The company has reported a return to losses, impacted significantly by legal costs and a provision for fines related to a Competition and Markets Authority (CMA) case.
- Despite a challenging year, Keltbray’s revenue has surged by 31%, reflecting robust underlying business performance.
- The firm’s order book has more than doubled, signalling potential growth in the coming financial periods.
- Legal challenges with the CMA have led to unexpected costs, affecting the company’s financial health.
- Keltbray is actively pursuing growth strategies through enhancing internal capabilities and service offerings.
Keltbray, a multidisciplinary specialist, has experienced a financial setback, recording a pre-tax loss of £1.2 million for the year ending 31 October 2023. This marks a reversal from a pre-tax profit of £3.4 million the previous year. The company’s financial performance has been impacted by two significant exceptional items totaling £2.7 million, which include legal expenses associated with its ongoing dispute with the Competition and Markets Authority (CMA) and refinancing costs.
The legal dispute stems from a case involving allegations of collusion over tender prices between 2013 and 2018. A provision of £6.25 million has been made for anticipated fines, consistent with the figures allocated in the last two years. The CMA initially imposed a £20 million fine, which was set to be reduced to £16 million for cooperation. However, this reduction was revoked when Keltbray challenged the penalty calculation methodology, arguing it was incorrectly based on all its turnover rather than its specialised operations.
Despite these challenges, Keltbray has achieved a remarkable 31% increase in revenue, climbing from £527.9 million to £689 million. This growth occurred in a high-cost environment with rising sales expenses and competitive pressures on margins, stemming from inflationary impacts on material and labour costs. Some project start delays were noted as clients reassessed plans amid these pressures.
The firm’s forward order book paint a promising picture, having more than doubled to £1.1 billion by the financial year’s end, with 75% of this work slated for the 2023/24 period. Chief Financial Officer Peter Burnside expressed confidence in Keltbray’s growth strategy, underpinned by enhanced specialised engineering capabilities and a strong service offering, despite current market challenges.
Cash reserves concluded the financial year at £33.6 million, marking a modest increase of £522,000. This financial resilience further supports the firm’s positive outlook, despite the ongoing legal and operational challenges.
Keltbray’s strategic focus on strengthening its engineering capabilities and expanding its service offerings positions the company well for future success, despite current legal and financial hurdles.
