Cumulative losses across the period have reached £132m, prompting the contractor and its Malaysian co-owner to launch a review ‘to identify any underperforming units’.
JRL has initiated a strategic review of the business alongside its new co-owner after posting a third consecutive annual loss, taking total cumulative losses to more than £130m.
The company recorded a pre-tax loss of £47m in 2022, followed by a further £36m deficit in 2023.
In its most recent accounts, covering the 16 months to April 2025, the firm reported a pre-tax loss of £49m, bringing total losses for the period to £132m.
In a statement, chairman John Reddington said: “The last few years have been amongst the most challenging the Group has faced in its 30 year history.
“The construction industry has been operating against a backdrop of prolonged cost inflation in labour and materials, tighter credit conditions and fixed price commitments that, in many cases, have translated directly into losses.
“These pressures, together with a small number of under-performing contracts, are reflected in the Group’s financial results for 2022, 2023 and the period to 30 April 2025. We have reviewed these outcomes in detail.
“A comprehensive contract by contract review identified a number of historic issues which had already begun to impact the 2022 and 2023 results and led to restatement of the 2022 financial statements. That work has been difficult but necessary. It has given the Board much greater visibility over risk, strengthened our controls and ensured that the balance sheet now more fully reflects the realities of our project portfolio.”
In April last year, JRL completed its agreement with Malaysian conglomerate IJM Corporation, which acquired a 50% stake in the business for £50m. The group also extended its financial reporting period by four months to accommodate the transaction.
JRL said: “Alongside selective property disposals and disciplined capital allocation, this [deal] has allowed us to reduce net debt by over £32m and to cut property related borrowings by around half. We were pleased to secure this new equity from IJM, who have joined us as a long-term investor and strategic partner.”
The company confirmed it had begun “a comprehensive end to end review of the business to identify any underperforming units” with its new partner.
It added: “This will be a multi-year, phased review, starting with a detailed assessment of overheads, management reporting, operating centres, gross margins and our off site manufacturing platform, including how these assets can better support programme certainty for our clients.
“In parallel, and in conjunction with IJM, we are undertaking a broader business model review, reassessing fixed price risk in light of recent inflationary experience and considering where activities or costs could be more appropriately managed externally rather than within the Group.”
JRL, which comprises 14 companies including main contractor Midgard, concrete frame specialist J Reddington and London Tower Crane Hire, said it would “rigorously challenge all aspects of [its] in-house delivery [model]”.
Midgard remains the group’s largest division. Total turnover across the wider business reached £785m for the period — equivalent to £49m per month over 16 months – compared with £825m in 2023, when the monthly equivalent stood at £69m.
Reddington said the “worst effects of the recent inflationary spike are now largely behind the business” and noted that the company’s order book had reached £2bn for the first time.
He said: “With a stronger balance sheet, improving trading momentum and the support of our strategic partner IJM, we are looking forward to returning to profitability in 2026 and onwards.”
Reddington added that the IJM deal had increased net assets to £113m by the end of April 2025, up from £101m at the close of 2023.
Listed on Bursa Malaysia, IJM was founded in 1983 and operates across construction, property development, materials and infrastructure concessions.
For the year to March 2025, IJM reported a 7% rise in turnover to RM6.3bn (£1.16bn), although pre-tax profit fell 18% to RM791m (£147m).
In its latest annual report, IJM said: “Our investment in JRL Group strengthens our ability to take on technically challenging, engineering-led building projects. These capabilities are critical for our London property ventures.”
Source:www.building.co.uk
