Contractor Takes £6.8m Hit Following Britishvolt Collapse
NG Bailey, one of the UK’s largest engineering and construction firms, has posted a £25m pre-tax loss for the year ending 3 March 2023, down from a £3m pre-tax profit the prior year.
The group attributed the losses to a number of factors, including unprecedented inflationary pressures, delays, and supply chain failures on a small number of major fixed-price contracts, as well as the collapse of Britishvolt, a battery start-up in which NG Bailey had invested £6.8m.
NG Bailey chief executive David Hurcomb said: “Costs have risen substantially, above what we could have ever anticipated.”
“Fixed-price engineering contracts had been particularly vulnerable to inflation, as contracts were signed months or years before work started on site,” he added.
Despite the losses, Hurcomb said he was optimistic about the future of the business, pointing to a strong order book and a number of major projects in the pipeline.
“We have taken a big hit, but that is behind us,” he said.
The NG Bailey results are a sign of the challenges facing the construction industry, which has been hit hard by inflation and supply chain issues.
A number of other construction firms have also reported losses in recent months, including Kier Group and Galliford Try.
The industry is now calling on the government to provide support, such as extending the energy bill relief scheme and providing more help with the cost of materials.