Record turnover last year helped civils contractor Colas Rail boost its pre-tax profit by almost 60 per cent.
Annual revenue rose by 10 per cent on 2022 to reach an all-time high of £403.7m, the firm announced in its accounts for the 2023 calendar year.
This generated a pre-tax profit of £27.9m, up by 58 per cent on the previous year’s £17.7m.
As a result, the London-based firm’s margin broadened from 4.7 per cent in 2022 to 6.9 per cent.
Directors said that revenue was a “key metric for growth measurement” but they also “carefully select work undertaken to ensure underlying profitability is safeguarded”.
Combined figures for Colas Rail and its sister company Colas Ltd saw them finish 32nd in the CN100 2024 ranking of top UK contractors.
Rail construction work continued to account for the bulk of turnover in 2023 – £281.9m compared with £252.4m the previous year.
The rest of Colas Rail’s revenue came from its freight and maintenance business unit.
The 2022 profit figure was restated from the original £15.4m after “statutory audit adjustments”, the firm said in its latest accounts.
Cash at bank inched up by £89,000 to £15.9m, while short-term bank loan debt remained stable at £1.7m.
Colas Rail reduced its bank loans repayable beyond 12 months from £14.4m to £12.7m.
Importantly for its supply chain, the firm had 28 days of trade and subcontract purchases outstanding at the end of last year – a better performance than in 2022 (33 days). “This aligns with our target terms for suppliers,” the firm said in its accounts.
Colas Rail employed a monthly average of 1,454 employees last year, up from 1,342 in 2022. This increase saw the annual wage bill exceed £100m in 2023.
The firm said it reduced its staff turnover from 13.5 to 9.7 per cent.
The accounts also mentioned that Colas Rail “is aware that its current employees may be exposed to certain substances or conditions that may lead to industrial disease in the future”.
This prompted the firm to book a provision of £325,000 (including an extra £200,000 last year) for “potential future claims by former workers arising as a result of events or circumstances they encountered while working at Colas Rail Ltd or a predecessor company”.
No dividends were paid last year, although after the period covered in the accounts, the firm paid a £45m dividend to its parent company Colas Rail Holdings Ltd.
Colas Rail’s year-end order book of £958m was 8 per cent higher than the 2022 figure of £884m. Directors said the firm has a secured pipeline of work to 2025 “as a result of successful Control Period 7 negotiations [with Network Rail for 2024-2029] and confirmed re-award of substantial amount of Control Period 6 work [for 2019-2024]”.
