Keltbray Group, a leading UK specialist construction and civil engineering business, today released its Consolidated Financial Statements for the year to 31 October 2018.
Against a backdrop of a tightening market and a reduction in activity in the Group’s core sectors, the Group experienced a moderate drop in turnover to £399m but is forecast to come close to £500m in 2019 due to its continued diversification strategy which has opened up access to adjacent markets.
Operating profit at £17.9m and profit before tax of £17.8m were 24% below the previous year but the Group’s consolidated net assets have increased by 22.5% to £40.9m giving the Group a secure base upon which to build controlled and profitable growth.
The directors’ strategy for continued diversification of the Group’s activities into specialist engineering areas which are aligned to existing activities has helped to offset any contraction in the Group’s traditional markets.
- the acquisition of the trade and assets of a UK power distribution and transmission business formerly carried out by the French owned group SPIE UK. This business has now been re-branded as Keltbray Distribution and Transmission (‘KDT’).
- the acquisition of 75% of Lagan Power Limited, which has been rebranded Keltbray Lagan Power Limited, a company which provides high level engineering services to the Regulated sector and their commercial clients.
- the launch of Keltbray’s first significant overseas business with the incorporation of Keltbray International Limited in Canada.
Brendan Kerr, CEO of Keltbray Group, said, “I’m pleased with the progress made so far by our diversification strategy to maintain controlled and profitable growth. Our efforts have resulted in a good spread of turnover among our companies during the 2017/2018 period with the growth in both reinforced concrete structures and power stations decommissioning helping to offset falls in our traditional markets.
“We remain committed to our specialist contractor roots and the continuing investment in our self-delivery model. To employ, manage and train our own employees using our own specialist plant and equipment means we have a mitigation strategy to meet the challenging conditions we currently find ourselves operating in. We are contemplating further acquisitions to continue our diversification strategy and our directors are optimistic of continued revenue growth in 2019.”
Looking at KDT specifically, the acquisition of the power distribution and transmission business and assets from Spie was deemed a good fit for Keltbray as it already had a significant overhead line electrification business – Keltbray Aspire Limited – in the rail sector. Furthermore, as many of Spie’s clients already worked with Keltbray Group, the acquisition provided an opportunity to provide them with a more integrated service offering.
Approximately 300 new employees have been on-boarded into the Keltbray Group from Spie along with a workbook that currently amounts to approximately £40m per annum. A major investment by Keltbray Aspire Limited in people, assets, fleet, safety equipment and training, the acquisition adds significantly to the Group’s geographic footprint within the UK.
The KDT business ended the year in a close to breakeven position as the directors’ business improvement plan began to take effect and the business is forecasting a reasonable profit at the end of 2019.
In 2018, the Group commenced its first significant overseas business during the year with the incorporation of Keltbray International Limited in Canada.
During the year, a number of employees were seconded to the Canadian market to work with Keltbray’s Joint Venture partners in a bid to deliver overhead line electrification work in support of the significant upgrade of the Canadian rail infrastructure. This strategy has been partly developed to mitigate the risks around the potential slowdown of works in the UK rail infrastructure sector as Network Rail transitions from the end of its current Control Period 5 (March 2019) into its next five years spend window (Control Period 6).
The Canadian company has now won its first major contract to deliver overhead line electrification in association with Keltbray’s Canadian Joint Venture partner Smith & Long Limited.
Keltbray International Limited continues to bid for work both in overhead line electrification and rail engineering works, where the Group’s significant investment in specialist operatives and plant can assist in pushing levels of safety, quality and productivity beyond that of the competition.