Amidst unprecedented challenges, UK scaffolding firms exhibit remarkable resilience, facing substantial financial pressures head-on.
- The pandemic has significantly impacted the scaffolding sector, with revenue and profits down across most top firms.
- Eight major firms saw a collective revenue drop of £107 million, as only Kaefer reported growth due to strategic acquisition.
- Despite financial downtimes, scaffolding companies bolstered their cash reserves by 73%, prioritising liquidity amidst uncertainties.
- Labour shortages present ongoing challenges, with calls for increased direct employment yet to see effective action.
The COVID-19 pandemic wrought significant challenges across the scaffolding sector, with revenues and profits at many of the top firms declining sharply as lockdowns and reduced workloads came into play. While most businesses in this field are adapting to the new circumstances, the overall downturn has been substantial.
According to reports, eight major scaffolding companies reported a combined revenue decrease of £107 million during 2020. Kaefer stood as the exception, experiencing a revenue rise due to acquiring Wood Industrial, though its overall revenue of £124 million lagged behind Wood Industrial’s earlier performance.
In response to these economic challenges, scaffolding companies have concentrated on reinforcing their liquidity. The eight firms collectively increased their cash reserves by 73% during the reported period, recognising the critical importance of maintaining financial stability.
A noteworthy element affecting the industry is the skilled labour shortage, exacerbated by an over-reliance on agency and self-employed workers. This has led to increasing wage inflation, with industry leaders emphasising the need for action towards direct employment solutions.
Helen Gawor of GKR Scaffolding highlighted that businesses were anticipating a tough year, largely due to economic pressures from Brexit and past recession lessons, but the reality exceeded their expectations. She emphasised the resilience and adaptability shown by the sector during these trying times.
Consolidation within the industry is evident, as seen with Altrad UK’s ascension through strategic acquisitions, including Interserve’s RMD Kwikform, creating more robust market players.
Gawor also stressed the power of collaboration within the scaffolding community, suggesting that similar cooperation could address the labour shortage issues plaguing the industry.
Ultimately, while the sector faces significant challenges, its adaptability and resilience provide hope for overcoming these hurdles successfully.
