The decision to scale back the High Speed 2 (HS2) rail scheme has taken a toll on Kilnbridge’s financial performance, the specialist contractor has disclosed in its latest set of accounts.
The East London-based building and civil engineering firm reported a turnover of £85.9 million for the year ending 30 June 2024—a significant drop of 28 per cent from the previous year’s £120.1 million, when it had seen a 23 per cent increase in revenue.
Kilnbridge’s executive chairman Dermot McDermott acknowledged the impact of the government’s decision, stating the business was “impacted somewhat by the cancellation of the Northern and the Euston leg of HS2”.
The Birmingham to Manchester leg of the HS2 project was scrapped in October 2023, as announced by then-prime minister Rishi Sunak.
At the time, the Conservative government had proposed Old Oak Common as a temporary London terminus, with a final verdict on the Euston extension to follow. However, Labour’s chancellor Rachel Reeves later confirmed that HS2 would indeed extend to Euston.
Profit Halves as Margins Narrow
Despite finishing ninth in the CN Specialists Index for concrete contractors last year and having operated as an employee-owned trust since March 2021, Kilnbridge saw its pre-tax profit fall sharply—from £3.8 million to £1.5 million. As a result, the company’s profit margin shrank from 3.2 per cent to just 1.7 per cent.
Nevertheless, McDermott highlighted the company’s financial resilience: “Prudent financial management ensured we maintained a strong balance sheet, positioning us well to pursue tender opportunities”.
Kilnbridge ended the financial year with a record secured order book of £200 million. Its cash reserves also rose by £3 million to £10.4 million, and the company remained free of any bank loan debt.
However, dividend payouts reduced substantially, from £6 million in the previous year to £1.8 million in the most recent period.
Leadership Changes and Future Outlook
McDermott described the year ending June 2024 as “transformative” for the company. In May 2024, Kilnbridge undertook a major leadership transition.
McDermott stepped down from his role as chief executive, 33 years after founding the firm, and was succeeded by Owen Dannatt, former chief operating officer at Shard developer Sellar.
Tom Sullivan was also appointed chief operating officer and executive board director, taking charge of risk management and internal operations.
“Since Owen joined we have been reviewing the company’s structure and making changes that affect how our business is governed,” McDermott noted in the annual report. “This work is still in progress.”
Staff numbers saw a slight decline, with the average monthly headcount dropping from 353 to 343. Correspondingly, the total annual wage bill decreased slightly from £25.6 million to £25.2 million.
