Project delays curb Ardmore growth ambitions

Aaron Morby 1 year ago
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South East contractor Ardmore missed ambitious profit and growth targets last year after four major project starts were delayed and several subcontractors collapsed.

The firm expected to deliver a sharp jump in revenue to £550m last year on the back of a strong pipeline of orders.

But the delays and wider market and inflationary challenges saw revenue rise by a more modest 7% to £435m, although still reaching a record for the hotel refurbishment and luxury to affordable housing contractor.

Pre-tax profit for the year to September was more heavily impacted falling to £6.5m from £15.3m previously.

In freshly published accounts managing director Patrick Byrne said: “The board’s expectation was based on four pipeline opportunities progressing as planned, but all four have either had start dates delayed, or construction delayed by others.

“These factors, together with disruption caused by supply chain failure on three projects and a serious accident at our Hammersmith site, account for the significant reduction.

“Inflation and poor performance has eroded profitability, which is down 6.5% from the 8.5% expected at the start of the year.”

He added: “Having to reprocure the incomplete works at premium rates, following supply chain failure, has doubled the impact of inflation.”

Despite the challenges working capital remains strong with cash reduced from £114m to £94m.

Byrne added: “With the challenging economic environment expected to continue into 2023 management has reset expectations.

“Turnover has been trimmed to £450m and profit after tax has been reduced to a more modest level of just under £7m.

“The expectation is this will allow inflationary pressure on fixed price construction contracts to work its way through before margins recover to more normal levels in 2024.”

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