JRL revenue rises, but inflation dents profits

JRL Group’s revenue increased last year, but its profits dipped because of inflationary pressures.

The Hertfordshire-based firm turned over £610m in the year to 31 December 2020, which was a 7.1 per cent rise on the £570m it made during the previous year when the pandemic affected its projects.

However, its profit before tax fell a little, from £27.19m in 2020 to £26.80m in 2021.

The groundworks arm of the group, J Reddington, saw profits before tax dip significantly, from £8.3m in 2020 to £0.8m in 2021, representing a 90 per cent percentage decrease.

Cost inflationary pressures were blamed for this. JRL said that while it was not seeing the impact of Brexit and COVID-19 on its supply chain, the Ukraine conflict was adding to cost inflationary pressures. Directors said there would be a greater focus on cost efficiencies going forward.

In addition to the main contracting work, the wider group includes several specialist divisions for expertise in areas such as envelope, access, demolition and M&E – and there was a mixed performance among these sectors.

Midgard Public Sector Ltd, its public-sector building arm, reported a loss before tax of £0.4m, compared with a profit before tax of £2.1m in the preceding year.

Meanwhile, its envelope arm, UK Facades Ltd, saw revenue fall from £52.7m in 2020 to £18.7m in 2021. This was attributed to problems with legacy contracts.

Profits for JRL Demolition swelled fourfold to £0.6m before tax. Ark Mechanical and Electrical Services reported a revenue jump from £74m in 2020 to £105m in its latest accounts.

The wider group’s cash reserves increased from £112.8m in 2020 to £122m in 2021.

JRL, which had historically focused on London and the South East, has attempted to move more of its business northwards.

Group chairman John James Reddington said 2021 was the year that the group decided to move away from the private residential sector in London and the South East, and landed its first major contracts in the northern cities of Birmingham and Manchester.

Looking forward, he said the group would continue with its self-delivery or integrated model, providing clients with solutions across the supply chain.

“Our integrated model appears to be gaining support,” said Reddington.

In April, JRL bought troubled firm Caledonian Modular after it went into administration, which saved 200 jobs and gave the group off-site capabilities.

Reddington added that the firm had a strong order book, and was particularly hoping to benefit from its build-to-rent work in the year ahead.

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