CN Specialists Index 2024: top 10 envelope contractors

When glazer Alucraft Systems filed for administration in April, a company statement cited “an extremely challenging trading environment”. Then in August, Skonto Plan UK went into administration too. With a £50m turnover in its latest accounts, it would have appeared in this year’s top 10.

These two firms are far from the only facade specialists to feel financially challenged in the past year. The Clarison Group, parent company of Alucraft Systems, was 10th in last year’s list with a turnover of £58m – which it had since grown to £85m – but it filed for liquidation in July.

Wider economic issues, labour shortages and the aftermath of the Grenfell Tower fire have all been cited as constraints on the sector.

Turnover for the top 10 envelope firms in their most recent reporting year was 1 per cent down on the year before, to a combined £967.7m. The median pre-tax margin of the top 10 in the envelope sector recovered from -1.2 per cent last year, but only to a slim 1.6 per cent.

Lindner Prater and McMullen Facades saw the worst pre-tax losses of £36.6m and £21.8m respectively – a decrease of 434 per cent and 218 per cent. It is worth noting that these two firms’ figures are for the year ending 31 December 2022. The other eight contractors’ accounts cover either all or some of 2023.

Stanmore topped the list for the second year in a row, posting a strong margin of 4.9 per cent despite its turnover dipping by 4 per cent and pre-tax profit falling by 10 per cent. “The market for long-established companies is tough – mostly due to claims coming from past jobs and a general slowdown in the industry as a result of interest rate hikes,” says Stanmore procurement director Haman Manak.

“Currently, contractors can, at times, be blamed for the design on past works that at that time were signed off by all concerned and were then acceptable to the industry standard regulations.”

He adds that the process of gaining clarity on design responsibility and compliance with the new Building Safety Regulator has also been a challenge.

Metal Cladding and Roofing Manufacturers Association director Carlton Jones says the cost of professional indemnity insurance remains a major concern for the sector. This has been compounded by the Building Safety Act and its potential for big claims to be made against any part of the design and specification chain that makes changes to specifications, he adds.

The long-awaited publication of the second Grenfell Tower Inquiry report in September shone a spotlight on those engaged in cladding but Manak believes the sector has already “moved miles” in recent years.

Jones is cautious about future prospects. “The change of government and their wish to increase housing starts may provide an opportunity but skilled labour is hard to find and will become more difficult to find. The big number sounds good, but may be difficult to achieve,” he says.

Though he agrees a lack of “boots on the ground” is a potential bottleneck, Manak is more upbeat. “The long-term growth of the market looks healthy – and will no doubt continue with remediation works being carried out across the country, as well as expected interest rate cuts, which will be a big boost for work across the industry. The future looks bright.”

UK’S TOP 10 ENVELOPE CONTRACTORS

Notes: McMullen Facades No new accounts filed since previous Specialists Index. Yuanda Accounts updated twice.