Keltbray to sell off infrastructure business to concentrate on building arm

Keltbray is set to be broken up with the firm selling its near £400m turnover infrastructure business to concentrate on its building work.

Building understands the deal will see the infrastructure arm, which includes its highways, rail and energy businesses, sold to private equity within the next few weeks with current chief executive Darren James heading up the new company which will be based in central London.

The building business, which last year posted a revenue of £311m, will retain the Keltbray name and will be led by the firm’s owner and current executive chairman Brendan Kerr.

The infrastructure business is Keltbray’s biggest and employs just over 1,100 people and had an order book at the end of October last year, Keltbray’s year-end, of £710m.

Keltbray, which declined to comment, has been building up its infrastructure business over the years under a diversification strategy which began with its deal to buy stricken track maintenance specialist Gamble Rail in 2009.

In autumn 2021, Keltbray picked up collapsed firm NMCN’s infrastructure business which included its highways, flood alleviation and renewable energy jobs and saw it land a spot on the list of firms appointed to carry out work on the planned A66 upgrade in northern England.

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James was brought in to Keltbray in spring 2020 after spending more than three decades at Costain, having been its chief operating officer.

In his first 18 months he tightened up its corporate governance and two years ago he told Building: “It’s not about going against Keltbray’s entrepreneurial spirit, it’s about having checks and balances and making it an integrated organisation.”

Selling infrastructure will see Keltbray concentrate on ground engineering, demolition, sub and super structure work as well as construction plant.

The built environment business, which will continue to be based in Esher, Surrey, had an order book of £337m at its year-end and employed just over 800 people.

In its last set of results, Keltbray, which was set up in 1976 with Kerr, who joined as a project manager in 1989 becoming the majority owner in 2003, posted a record turnover of £689m, a rise of 30% on last time.

Pre-tax profit fell from £3.4m to a £1.2m loss, which the firm said was down to the cost of a refinancing deal and legal fees associated with its appeal against the £16m fine imposed by the Competition and Markets Authority (CMA) for its involvement in the demolition sector’s bid-rigging scandal. The infrastructure business is unaffected by the CMA inquiry.