Integral UK has reported a £31.6m loss after suffering from inflation and loss-making legacy contracts.
The building services and fit-out specialist, which is owned by real-estate giant Jones Lang LaSalle (JLL), saw its turnover increase by 3 per cent to £362.4m in the 12 months to 31 December 2023.
However, the company more than doubled its £14.4m loss from 2022.
Chief financial officer Peter Harris said in a strategic report that the company had undergone a “transitional year” affected by “macroeconomic and geopolitical headwinds”.
“From a cost perspective price inflation experienced in the UK continued to affect the profitability of long-term facilities management and construction contracts,” he added.
“Management has accelerated the programmes to address performance issues, including executing on actions to reduce and close-out exposures on long-term construction contracts which had negatively impacted the profitability in the current and preceding years.”
Harris said that £7.2m was lost on “a small number of high-value legacy construction contracts” that will wind up in 2024, while the group has also “taken steps to rationalise certain multi-year engineering contracts in order to drive profitability in future years”.
He added that the company had spent £3m on redundancy costs, with the accounts revealing that the average number of employees at the group dropped from 2,245 to 1,985 during the year.
Harris said despite the loss, the company continues to be viable due to a £15m cash injection from its owner JLL in March, adding that integration with its parent group was leading to an increase in contracts from “JLL investor and occupier clients”.
Integral operates from eight locations in the UK, with two London offices and offices in Birmingham, Chatham, Leicester, Newcastle, Newmarket and Warrington. The company was originally founded as Staveley Industries in 1863, but was rebranded as Integral in 1997 and bought by JLL in 2016.
