Dalkia Group has posted a £16.2m loss after being impacted by programme delays, high inflation and onerous contract losses.
The firm saw a pre-tax loss of £16.2m for the year to 31 December 2023, compared with a £4.3m profit the year before, while turnover from continuing operations increased to £581.8m compared with £448.6m.
The London-based engineering firm, which is owned by French state energy firm EDF, pointed to a “strong sales performance”, but revealed struggles in its engineering unit caused its profit to turn to a loss.
In its accounts published for the year, which were released this week, the firm said 2023 had been a “challenging year for the economy and construction industry”.
But it added the results were in line with expectations. Cash also fell from £85.2m to £42.6m, while it reported a £14.5m provision to deal with losses from contracts, nearly double the £7.3m provision it put aside the year before.
The engineering unit suffered a number of onerous contract losses from a “small set of construction projects in Scotland and in the Midlands”, while it also struggled with widespread increases in inflation, interest rates and energy prices.
Dalkia Group also said that the rise in inflation during 2023 had “eroded businesses purchasing power”, while the cost of borrowing had increased too, reducing investment capacity.
The firm’s facilities management business did better, increasing its revenue by more than 10 per cent, though the energy services unit struggled due to cost inflation and delays in new orders.
The group’s profit was also partly down to the firm selling its Ireland operation, Suir Engineering, to private equity group Duke Street in January 2023.
In December 2022, Dalkia bought Spie’s UK business for £43m. In results published earlier this year, the mechanical and electrical business, now called Dalkia Operations, struggled with restructuring costs, high provisions and project delays, which forced down profit and revenue.
In the latest set of accounts, Dalkia Group said its new unit had a portfolio of contracts in the education sector that will “creat[e] stability and improve the resilience of the overall business”.
Looking ahead, Dalkia said the “size and quality of our order book places the business in a strong position to perform financially and operationally in the years to come”.
It said trading was in line with its 2026 strategy, and that as well as delivering “organic growth” it will continue to explore acquisition options.
In the latest edition of the CN100, Dalkia was the UK’s 33rd biggest contractor.
