Fixed-price jobs see JRL losses top £80m in past two years after firm forced to restate 2022 accounts

JRL chairman John Reddington has admitted the past two years have been among the most challenging in its 27 year history after restating its 2022 accounts resulted in a £47m loss with the owner of Midgard staying firmly in the red last year with a £36m loss.

The company had posted a pre-tax profit of £13m when it filed its 2022 accounts in July last year.

But in its 2023 accounts, JRL said that the cost of materials and labour on fixed-price contracts “have led to notable increases in the estimated total costs require to complete these projects”.

It added: “The operating performance of the affected contracts reported in the finance statements [for 2022] was materially misstated.” It said the overall impact of the adjustments was to reduce equity by £47.5m to £94m.

The firm, whose group of 14 companies also include concrete frame business J Reddington and London Tower Crane Hire, said that pre-tax losses last year had narrowed – but were still £36m.

Revenue at the business, which employs 2,300 people, was up 8.5% to £826m. Cash at the bank and in hand fell from £117m to £82m, the accounts added.

In a statement, Reddington said: “Last year was one of the most challenging periods in in JRL Group’s 27 years trading.”

He added: “The construction industry faced significant disruptions due to economic instability, material shortages, record inflation and unexpected project delays.”

But he added the firm had turned a corner. “The directors view the financial outcomes in 2022 and 2023 as anomalies, not reflective of the long-term trajectory of the business.

“Our pipeline is robust, with several major contracts that were previously delayed now coming to fruition. We anticipate a more stable economic environment which will alleviate some of the pressures we experienced in 2023.”

It added that it had turned in a “strong performance” in the first half of this year, with pre-tax profit up on forecasts, and that its book stood at £1.5bn.

It said that the amount it had set aside for remedial works at the end of 2023 was £10.5m while the amount it set aside for loss-making contract provisions at the end of last year was £6m, having stood at £16m at the beginning of 2023.

The firm added that in April this year it sold an investment property for £12m which saw it book a net cash inflow of £8.5m.