Alun Griffiths narrows losses after scaling back exposure to major contracts

Civil engineering contractor Alun Griffiths has significantly reduced its annual losses after reshaping its business to focus on smaller-scale work, following heavy cost pressures on a handful of large fixed-price projects.

For the year ending 31 December 2024, the company reported a pre-tax loss of £48.9m, almost half the £95m loss recorded the previous year. However, this still marks the firm’s sixth consecutive year in the red.

Turnover fell sharply from £262.7m to £195.2m, reflecting a deliberate move away from high-value projects, while cash reserves dropped from £8.3m to £351,000.

Founder Alun Griffiths, who reacquired the business from Tarmac in May, said the losses were driven “almost exclusively” by four legacy fixed-price contracts signed before the Covid-19 pandemic and prior to Russia’s invasion of Ukraine.

He said those events triggered “unforeseen economic disruption”, with the contracts further affected by weather delays, programme changes and escalating supply chain costs, all of which undermined their delivery.

Following a strategic review carried out in 2024, the company has decided it will no longer pursue “multiple, high-value, discrete projects” of this nature. Instead, the review assessed future market conditions and refocused the business on work better aligned with its core capabilities.

While the shift has reduced risk, it has also contributed to the fall in turnover.

Despite this, Griffiths said trading performance in 2024 remained “strong”, highlighting the firm’s growing involvement in multi-year framework agreements and long-term client partnerships.

The company expects the problematic contracts to be completed in the first quarter of 2026, but they continue to weigh heavily on the balance sheet.

During the year, Alun Griffiths made total provisions of £28.9m, including £27.4m for onerous contracts and the remainder for legal matters. This compares with £58m of provisions in the previous year.

Looking ahead, Griffiths pointed to improving medium- and long-term prospects, citing a “significant shift” in public sector investment. Ofwat’s approval of £104bn of water sector spending between 2025 and 2030, alongside indications of up to £750bn of infrastructure investment over the next decade, was described as a major opportunity.

He said the company is well placed to benefit through its participation in procurement frameworks tied to these programmes, helping to build a sustainable and lower-risk pipeline of work aligned with its experience.

Meanwhile, auditor Deloitte stepped down following the sale of the business back to its founder. The company said it expects to appoint Hazlewoods LLP, based in the South West, as its new auditor.