The 2023 Index reveals inflation’s impact on scaffolding sector revenue, profit and margin.
- Top 10 scaffolding firms experience a decline in median pre-tax margin from 6.7% to 5%.
- Aggregate revenue for leading firms has increased by 21% from the previous year.
- Alltask and Kaefer demonstrate notable growth, with significant revenue increases.
- Challenges such as labour scarcity and inflation are affecting industry dynamics.
Inflation continues to exert pressure on the scaffolding industry, as evidenced by the 2023 Index, which highlights a decline in pre-tax margins for the top 10 scaffolding firms. The median pre-tax margin decreased to 5% from 6.7% in the previous year, highlighting the financial strain on these companies.
Despite the challenges, overall revenue for the leading firms increased by 21% compared to the 2022 leaderboard. This growth, however, does not reflect evenly across all companies, with some experiencing significant contractions in their financial performance.
Alltask, for instance, showcased a remarkable rise with its revenue surging by 48.5%, alongside a significant tripling in pre-tax profit to £6.5 million. Such growth was attributed to strategic investments in digitisation and modular scaffolding systems, allowing the firm to enhance its turnover without a proportional increase in overheads.
Furthermore, Kaefer transformed a previous loss into a substantial £3.2 million profit, driven by a 10.8% increase in revenue. The support from government investment in sectors such as nuclear and naval shipbuilding has played a critical role in this turnaround.
Not all firms shared this positive trajectory; PHD Modular Access witnessed a 10.6% contraction in margins and a 58% drop in pre-tax profit. Similarly, GKR Scaffolding saw its pre-tax profit fall amidst heightened distribution costs induced by inflationary pressures.
The scaffolding industry faces severe challenges, particularly from labour scarcity and inflation, as highlighted by GKR Scaffolding’s increased costs. Enhanced planning is being implemented to manage these challenges, but the path ahead remains complex.
Strategic digitisation and investments have proven beneficial, with Alltask’s Daniel Fincham citing these as key growth drivers. Addressing the ongoing skills shortage remains a priority for the sector, underscoring the need for innovative solutions.
The scaffolding industry’s ability to navigate inflation and labour challenges will be pivotal in maintaining growth and stability.
