Last year’s analysis of the UK’s top 20 demolition professionals painted a picture of a sector in recession. Total revenue grew unnoticed 6% while earnings before tax declined 7%. Nothing exciting, but after a very strong performance the previous year, the numbers looked decidedly lackluster. This year, the situation has changed significantly. The top 20 demolition companies appear to be busier: total revenue has grown by more than 19% to £ 1.3 billion (2020: £ 1.1 billion). Profitability declined. This article was first published in the May 2021 issue of Construction Index. Register online. The same 20 contractors last year posted a gross profit of £ 61.6m before tax. This year, that number is down more than 30% to £ 42.8 million. Is Covid-19 to blame? Unlikely. Although the accounting periods for half of the companies listed here extend into the post-lockdown period from the end of March 2020 onwards, there is no clear pattern indicating that the pandemic has had a significant impact – at least, not yet. “Brexit uncertainty” is a frequently cited factor in whatever difficult business conditions have been encountered – as has been the case since the referendum in 2016. Keltbray, who remains largely the dominant player in the sector, notes that “ Lack of clarity and timetable Britain’s exit from the European Union is a growing cause of uncertainty and thus a dampening factor for the market and overall growth in the UK. ” Despite this, the company saw a pickup in business volume in the 12 months to October 2019, its most recent accounting period. Revenue increased 41.1% to £ 563.4 million (2018: £ 399.3 million). Over the past two years, Keltbray has been pursuing a policy of diversification “both sectorally and geographically” while maintaining focus on its core markets in the United Kingdom. The company is currently operating in both Canada and Australia, mainly in the railway infrastructure sector, and is actively seeking more business in the energy, health, transportation and home-from-home sectors. Despite the strong sales figure, Keltbray’s profit before tax fell nearly 40% from £ 17.8 million to £ 10.6 million in 2019. The company says gross margins have suffered “as a result of lower margins across a number of UK business units owed to the mix.” From tightening markets and operational delivery issues. ” The economic outlook remains uncertain while “market conditions are still tough and price levels are very competitive”. Second-placed Erith Contractors, whose most recent calculation was for the year ending September 2020, agrees that the market “remains very competitive” and that the economic climate “is challenging”. Having said that, the company recorded a 15.4% growth in sales to 203.2 million pounds (2019: 176.1 million pounds) and an increase in earnings before tax from 5.8 million pounds to 6.7 million pounds. With its most recent accounting period including a full six months of Covid disruption, Erith says that although many sites were forced to shut down for a while during the first shutdown in March, with 16% of the workforce cleared, all sites reopened soon and expiration dates. So it is not expected to be significantly delayed. Strong forward order book has allowed Erith to maintain its projected growth in turnover, “at which point the impact on our business and our results is minimal,” he confirms. Brown and Mason – a big name in the UK demolition industry and generally seen as one of the top five – finds themselves at number 15 on their list of the top 20 demolition professionals this year. The Brown and Mason Group sales volume for the year ended 30 April 2020 was £ 15.5 million – far from the top five. But its turnover in the previous year was much lower, at £ 174,000. what’s going? Last September, Brown and Mason Ltd, the £ 50m per year company owned by Terry Brown, called Cornerstone Business Recovery to act as an administrator. Sister company Brown and Mason Holdings has also been put into management. But Brown and Mason kept trading as if nothing had happened. In fact, in January 2020, nine months before Brown and Mason Ltd entered management, its assets, contracts, and order book were fully transferred to the Brown and Mason Group, formerly known as Brown and Mason Plant Hire, which is managed by managing director Nick Brown, Terry’s son. Nick Brown told TCI that Brown and Mason, as a third-generation family-owned company, includes a number of companies, all with similar names. “In the end, there were eight different companies owned by different family members,” he explained. “I ended up owning the Brown and Mason collection with my brother Richard and Lee.” “In 2019, my dad decided he wanted to retire, so all of our Brown and Mason limited contracts were replaced,” he explained. Brown said the goal was to make the transition as smooth and quiet as possible. Clients were all aware of the changes, no jobs were lost and none of the creditors ran out. “We moved the business on January 9, 2020 but we have the end of the year in April, so the current figure shows a turnover of 15 million pounds – but that’s just one quarter,” Brown continued. He added, “We have a business of between 50 million pounds and 60 million pounds, but we have actually lost an entire quarter this year due to Covid, and our sales for 2020/21 will be around 40 million pounds.” A more transparent ownership change occurred in July 2020 when concrete structures specialist Mauricero acquired a controlling stake from well-known demolition contractor Cantillon. The acquisition marks a milestone in Morrisroe’s endeavor to build a turnkey business by adding “full demolition and bottom box” capability to its concrete structures expertise. Morrisroe has been looking for acquisitions that would add value to its portfolio for some time. Two years ago, it was expected to buy foundations firm Cementation Skanska, but the deal fell through in January 2019, apparently because Moresru thought the asking price of £ 55m was too high. In May 2019, Morrisroe purchased GSS Piling & Geostructural Solutions instead, and Skanska decided to stick with cement. Cantillon’s latest accounts for the year ending June 2019 show a turnover of £ 37.2 million, almost unchanged from the previous year. However, profits before tax have grown from £ 3.1m to £ 5m. This article was first published in the May 2021 issue of Construction Index. Register online. The largest pre-tax earnings figure on this year’s Top 20 chart comes from DSM Demolition which has a pretax profit of £ 11m on a turnover of £ 38.5m – with a margin of nearly 29%. The family-owned DSM Demolition was sold to a management team supported by investor Metric Capital Partners in 2017 and merged with its sister company, land developer Brownfield St Francis Group, to create a single entity. Do you have a story? Email [email protected].