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Top 10 UK scaffolding contractors | results and analysis

12 Jun 12 Most big scaffolding contractors have come through the economic turbulence unscathed " with one or two high profile exceptions. Will Mann examines their finances.

Scaffolding has suffered along with the rest of construction during the difficult economic conditions of the past four years.

The size of the market, as reflected by the latest turnovers of the 10 biggest scaffolding contractors, was down around 4% - though collectively they were back in the black to the tune of £11.9m, with only two firms posting pre-tax losses.

Some scaffolding contractors have adapted to the economic circumstances better than others.

As one top 10 contractor observed: “The bigger players have found it much tougher during the downturn; the smaller, family-owned businesses have found it easier to adjust to the current economic climate, where the overall size of the cake is smaller, and the margins tighter.”

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 2 Cape Industrial Services 284.3 328.9 27.9 -43.9 9.8 -13.3 31/12/10
2 4 Interserve Industrial Services 135.7 133.6 0.4 0.1 0.3 0.1 31/12/11
3 6 Deborah Services 81.2 70.0 2.7 0.1 3.3 0.1 30/04/11
4 3 Harsco Infrastructure 107.6 122.4 -26.9 -10.6 -25.0 -8.7 31/12/10
5 1 Pyeroy 68.1 59.5 2.8 3.5 4.1 5.9 31/12/11
6 8 Xervon Palmers 32.5 31.3 -3.3 -2.4 -10.2 -7.7 30/09/10
7 7 Lyndon 29.9 30.4 0.5 1.2 1.7 3.9 31/03/11
8 9 Denholm 20.0 15.3 4.1 1.2 20.5 7.8 31/12/10
9 5 Trad 14.8 14.5 3.5 1.0 23.6 6.9 30/11/10
10 10 Brogan 10.8 10.9 0.2 -0.1 1.9 -0.9 31/12/11
    Totals 784.9 816.8 11.9 -49.9 3.0 -0.6  

Two of the three biggest scaffolding contractors have found the climate very harsh.

Cape Industrial Services, which operates largely in the offshore and industrial sectors, experienced a £44.6m drop in turnover to £284.3m. However, it has turned around alarming losses of £43.9m in 2009, and posted a pre-tax profit of £27.9m for 2010.

Harsco Infrastructurehas been less successful in dealing with its well-publicised problems. Turnover dropped again, but more alarming was the increase in pre-tax loss from £10.6m in 2009 to £26.9m for 2010. This despite a huge cost-cutting programme.

The firm said the “economic climate adversely affected results” leading to a “large scale restructuring in fourth quarter of 2010 to permanently reduce the cost base”.

Harsco also sold its event and accommodation business to modular buildings supplier Wernick.

Meanwhile Palmers, historically one of the sector's biggest names, also has its problems. The contractor's latest accounts from September 2010, when it traded as ThyssenKrupp Palmers, show a £3.3m loss on a turnover of £32.5m. In December 2011, the business was acquired by waste management company Remondis, and is now known as Xervon Palmers. It will be interesting to see if the new owners can turn things around.

At Interserve Industrial Services the outlook is better, with a marginal increase in turnover to £135.7m, but another wafer-thin margin of just 0.3%. However, the firm believes the “industrial support services market remains attractive”.

Deborah Services, part of the AIM-listed Siteserve Group, enjoyed the biggest growth of any top 10 scaffolder, with revenue climbing 15% to £81.2m and profit rising to a healthy £2.7m.

Turnover also grew significantly at Pyeroy, up from £59.5m to £68.1m, though pre-tax profit was down marginally. The firm, which specialises in the rail, marine, process, energy, and utility sectors, was upbeat about prospects for 2012, saying “spending in our target markets is comparable to 2011”.

Lyndon experienced a slight dip in turnover to £29.9m, with profit also falling. The firm said the “future state of the market remains uncertain”.

Denhom, although its turnover grew almost a third, and profit jumped 250%, said a “difficult 2011 was anticipated”. Similarly Trad, which grew profit 350% on marginally better revenue, said the economic climate was “challenging”.

Brogan, which posted a small pre-tax loss in 2010, was narrowly back in the black on a slightly increased turnover.

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