London M&E specialist Gratte Brothers doubled in size last year to reach £250m turnover, exceeding even board expectations.

But inflationary pressures and provisions on a major project, understood to be the giant 21 Moorfields Deutsche Bank HQ project in London, squeezed margins.

Despite these challenges, group operating profit still increased slightly to £2m (2022: £1.6m) in the year to March 2023.

Operating profit margin fell to 0.8% (2022: 1.2%) impacted by a £5.2m increase in provisions for contract losses at year-end, on “one significant and complex long-term project’.

The family-owed group established in 1946, now employs around 450 staff, of which over 200 are craft operatives.

Group managing director David Gratte said: “All group companies continue to grow and secure new opportunities over the past year and that puts us in a strong position as we move into 2024.

“This includes expanding into new markets, strengthening our capabilities as a principal contractor in certain sectors and diversifying our workstreams.

“The group continues to have a strong order book and pipeline of contracts with reputable partners in the medium term.”

Turnover at the core electrical and mechanical engineering services division reached £220m (2022: £98m).

This increased significantly, principally due to the timing of work undertaken reflecting the long-term nature of the company’s contractual arrangements.

Despite the single major project loss, the M&E division’s operating profit reached £2.4m (2022: £1.4m).  Operating profit margin slipped to 1% (2022: 1.5%) for the year after the provision.

Revenue at the group’s specialist security systems services was slightly ahead at £19.5m, while commercial catering installation and maintenance improved to £9.1m (2022: £7.2m) and building maintenance services edged up to £3.6m (2022: £2.9m).

Year-end cash at the group improved to £38m from £26m at prior year end.