Careys more picky over which jobs to bid as firm says it has drawn line under problem contracts

Careys has said it has finally drawn a line under a series of loss-making jobs which wrecked its 2022 numbers with the firm saying earnings at its construction business returned to the black last year.

The firm’s contracting business, which also includes drylining arm BDL, makes up virtually all of its £400m turnover but a combination of fixed price contracts and rampant inflation helped send the contracting division to a £38m loss in 2022.

But in its report and accounts for the year to September 2023, the firm said its construction arm posted an EBITDA of £9m – although group pre-tax profit slumped to just £657,000 from £42m last time, with this figure boosted by a £65m exceptional profit the firm made in 2022 on the sale of a development at Wembley to British Land.

Finance boss Martin Nilsson said the loss-making jobs had now been cleared and admitted some of those schemes were projects “we shouldn’t have taken on and others where the terms were pretty tough”.

They included commercial and industrial jobs and he added the firm had now made several changes to how it bids jobs – and where: “We are a fixed-price contractor and we have to manage that risk. We have a very stringent review process and we’re not doing one-off iconic projects now. We are sticking to our knitting.

“We are a UK only business as well. We had legacy operations in Ireland, which is quite difficult to operate in.”

In accounts filed at Companies House by Careys parent Araglin Holdings, the firm said it has secured 80% of its revenue target for the current financial year and had an order book of around £350m. Nilsson added revenue in the first two quarters of this financial year had hit target.

Careys, which has net assets of £138m including £48m of cash, said turnover last year was up 10% to £402.5m with Nilsson saying revenue growth this year would be around 4%.

The firm said it was halfway through a three-year, £45m spending programme on plant and technology, which include a new warehouse and office complex in Buckinghamshire for its plant and fleet business at Aston Clinton.

Careys’ traditional heartland has been London and the South-east but it is carrying out more jobs in the Midlands and Scotland where it has been working on a series of energy-from-waste projects.

During the period, Carey Group was handed an £8.2m penalty by the Competition and Markets Authority for its role in the bid-rigging scandal in the demolition sector which the firm said it had paid last April.