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Top 10 UK demolition contractors | results and analysis

21 Mar 12 Revenues have held up well among the UK's biggest demolition contractors, helped in part by diversification and growth in nuclear.

Keltbray has diversified into rail.
Keltbray has diversified into rail.

The financial health of the UK's biggest demolition companies looks far brighter than might have been expected given the bleak economic backdrop of the past four years.

The top 10 collectively posted a 5% increase in turnover, based on their most recent financial results, to just short of £390m.

Only one of the firms reported a pre-tax loss – and that was down to non-core operations.

Prospects for the future look decent too. The London market, which has been such a staple for firms like Keltbray, is coming back to life, and then there is the nuclear market. Four of the firms here – Erith, Keltbray, Squibb, and EDS – were recently named on the £304m Magnox decommissioning framework, which represents a strong and steady long-term work stream.

Rank by turnover Rank by profit Company Latest turnover (£m) Previous turnover (£m) Latest pre-tax profit (£m) Previous pre-tax profit (£m) Latest margin (%) Previous margin (%) Latest reporting period
1 9 Keltbray 87.1 108.2 0.2 5.8 0.2 5.4 31/10/10
2 10 McGee* 58.8 65.4 -0.8 -1.2 -1.4 -1.8 30/11/10
3 3 Erith 54.7 38.6 1.0 0.9 1.8 2.3 30/09/11
4 1 EDS 54.4 48.9 5.7 3.9 10.5 8.0 30/06/10
5 5 Cuddy** 31.2 16.3 0.9 0.4 2.9 2.5 31/07/10
6 7 Squibb 24.1 32.4 0.7 1.0 2.9 3.1 31/01/11
7 6 John F Hunt 22.8 16.6 0.9 -1.3 3.9 -7.8 31/03/11
8 4 Brown & Mason 22.8 15.4 0.9 0.8 3.9 5.2 30/04/11
9 8 Coleman 17.2 11.3 0.5 0.9 2.9 8.0 30/04/11
10 2 DSM 16.7 18.9 3.6 5.3 21.6 28.0 31/12/10
    Totals 389.8 372.0 13.6 16.5 4.9 5.3  

*McGee results cover 18 month period to 30 November 2010.
**Cuddy results are for 18 month period to 31 July 2010.

Keltbray remains the largest contractor in the demolition section, despite turnover sliding to £87.1 million from £108.2 million, for the year to 31 October 2010. Pre-tax profit plunged from £5.8 million to just £200,000 – putting the firm 9th out of the top 10 for profitability.

“As the largest contractor in the demolition sector it is not possible to avoid the worst market conditions in a generation,” the directors' report said.

The firm's revenue includes sizeable non-demolition operations, and it bought Gamble Rail in 2009. Keltbray has since restructured its business into three streams: demolition and civils; rail; and environmental materials management.

The directors' report described demolition enquiry levels as “satisfactory” with “competitive” margins.

McGee is positioned second in the table, although its most recent results cover an 18-month period – meaning the firm's revenues have dropped considerably on 2009.

It also posted another pre-tax loss - £800,000 compared to £1.2m in 2009. This was down to losing £500,000 on its tipping facility at Caddington Golf Course, which McGee said was as expected, and £1m on its recycling facility, “due to the reduced workload in the demolition market”.

Erith sits third in the table, both by revenue and profit, though its turnover climbed by 42% to £54.7m. The Kent firm said the growth was due to “increased cost of hazardous waste disposal, scrap metal prices, and our desire to increase market share”. It added that the demolition market remained “highly competitive”.

EDS also enjoyed turnover growth, and sits top of the pile for profitability, with a whopping margin of 10.5%, a further improvement on the fat 8% posted the year before.

The contractor attributed the healthy profit to “improving market conditions in the UK and geographical diversification”, plus the expansion of its asset recovery business, EDS Process Plant Solutions, with significant growth overseas.

Cuddy's figures are distorted by the firm changing its reporting date, so the latest results cover an 18-month period. This, according to the directors' report, represents a “per annum profit rate of £588,000 on an annualised turnover of £21.7m, an increase of 40% and 33% respectively”.

Squibb's turnover dropped by a quarter, but the firm remained comfortably in the black to the tune of £700,000; its pre-tax profit would have doubled but for bad debt charges. It also spent £1m on new plant during the reporting period.

Brown & Mason and Coleman both enjoyed substantial growth in turnover, by 48% and 52% respectively, while staying comfortably in the black.

DSM's revenue dipped, but it is the second most profitable demolition firm in the top 10, with a £3.6m pre-tax profit, and is top on margin, a whopping 21.6%.

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