The CN Specialists Index 2023 highlights the financial shifts among leading concrete contractors, marked by increased profitability and inflation challenges.
- Despite inflation impacting profits and margins, leading concrete contractors in the UK saw improved aggregate financial performance.
- Notably, PJ Carey faced a significant £48.1m loss, whilst newcomer FP McCann led the profit surge with £38.4m.
- Inflation and material costs due to global conflicts impacted AJ Morrisroe & Sons, which emphasised strategic contract revisions.
- Companies like Oliver Connell & Son thrived through diversified operations, targeting new markets despite industry challenges.
Despite facing inflationary pressures, the leading concrete specialists recorded a notable improvement in their aggregate financial performance this year. This growth was accompanied by challenges, as evident from three of the top ten firms registering losses, a departure from the previous year where only one firm was in deficit. PJ Carey emerged as the firm with the most significant loss, reporting a £48.1 million deficit, a stark contrast to others in the index.
Newcomer FP McCann played a pivotal role in the profitability surge with a remarkable pre-tax profit of £38.4 million, driving a 21% increase in aggregate pre-tax gains to £33.5 million compared to the 2022 figures. Their success exemplifies how strategic financial management can counteract the adverse effects of inflation.
Several established firms noted a substantial increase in pre-tax profits, albeit from low starting points. Ground Construction experienced the most substantial rise, increasing from £120,000 to £2.6 million, while Expanded achieved a six-fold increase from £1.3 million to £8.2 million. Oliver Connell & Son, entering fifth place for the first time, more than tripled its pre-tax profits, rising from £3 million to £10.1 million.
Increased margins were also a highlight, with the median margin rising from 1.1% to 3.9%. However, PJ Carey’s case illustrated the volatility, displaying a margin drop from 0.9% to -17.5%. These figures underscore the financial turbulence experienced by firms despite overall growth in revenue, which rose by an aggregate of £205.9 million to £1.82 billion in eight of the firms.
Companies such as Oliver Connell, Ground Construction, MPB Structures, and CJ O’Shea experienced growth in revenue, pre-tax profits, and margins. Firms are strategically adapting to counteract inflationary pressures through contracts and product sourcing adjustments, as expressed by AJ Morrisroe & Sons, who highlighted the impact of global conflicts on material costs.
James Connell, managing director of Oliver Connell & Son, attributed their successful year to diversification into sectors such as renewable energy and rail, despite challenging market conditions.
The broader industry context includes international conflicts affecting material availability and pricing, necessitating firms to reconsider project focus and financial strategies. Oliver Connell’s approach of finishing existing large projects while cautiously approaching new ones played a crucial role in their resilience and growth.
The concrete sector demonstrates resilience with strategic adaptations gaining financial growth amidst inflation.
