Projects in the infrastructure and entertainment sectors have delivered a “very strong performance” for VolkerWessels.
The contractor, which operates across the construction industry, tabled a pre-tax profit of £38.6m in the year to 31 December 2023, up from £37.7m.
In its accounts, released today (1 October 2024), the firm said: “Despite the economic challenges facing the country, the group delivered a very strong performance in 2023 which is a credit to the resilience or our businesses.”
The firm said much of its success was down to VolkerFitzpatrick’s “participation in a number of major and critical building and civil infrastructure projects”. These included HS2, a £174m project to build a TV and film production centre in Dagenham, and an £84m warehouse project in Corby.
VolkerFitzpatrick brings in nearly half of VolkerWessels’ revenue, and is part of the Align joint venture working on HS2 alongside Bouygues Travaux Publics, Sir Robert McAlpine. The JV is constructing a portion of HS2 that includes the Colne Valley Viaduct and a 10-mile-long twin-bore tunnel.
VolkerRail also performed strongly, mainly thanks to its work on phase two of the £6.6bn East West Rail project, which “remains the most significant contribution to both revenue and gross margin” at VolkerRail. It also worked on the eastern portion of the TransPennine Route Upgrade, and a rail upgrade programme in the Hope Valley, between Sheffield and Manchester.
VolkerWessels also singled out its civil engineering specialist VolkerStevin, which focuses on marine, energy, water and environmental infrastructure projects, and VolkerHighways.
The firm pointed to a number of challenges that affected the business in 2023, including the Russian invasion of Ukraine, the war in the Middle East and inflation.
“The availability of building materials and supply chain labour and related price inflation pressures were challenges that continued into this year,” it added.
“The impact of the Russian invasion of Ukraine and the instability in the home market, which affected borrowing costs and investor confidence in 2022, continued to impact the economic climate in 2023” the statement said.
“The economic conditions were further exacerbated in 2023 by the war in the Middle East together with government budgeting pressures delaying the start of projects.”
