Scotland’s biggest steelwork contractor J&D Pierce (Contracts) saw profits tumble last year as rising costs, delayed projects and lower-margin work combined to hit the Ayrshire specialist contractor.

Turnover for 2024 dipped 5% to £98m, but pre-tax profit plunged from £12.6m to just £0.8m.

A more challenging market saw operating margin collapse from 12% in the prior year to below 1%, as cost inflation in steel, coatings and energy coincided with fewer large high-margin jobs.

Managing director Derek Pierce said the market failed to deliver the upturn expected.

“By the end of January we knew it was going to be a difficult year as we had already had one large contract cancelled and several delayed or postponed indefinitely.

“This left significant gaps in our production with only limited low margin work available within the marketplace to fill the slots.

“Unfortunately this looked set to continue throughout the rest of the year which turned out to be the case.”

He said the company, which is backed by Swedish investment group Storskogen, used the downturn to overhaul systems, invest in new facilities, and tackle production bottlenecks.

Part of the investment centred on building new 480m-long, 350,000 sq ft coating plant in Bellshill, Glasgow, capable of handling 1,500 tonnes of steel a week. The site includes 24 new overhead cranes, automated blasting lines, and a 30-metre blast booth.

The relocation of the paint shop from Glengarnock has freed up fabrication space and added capacity for another 250 tonnes a week, said Pierce.

“Despite 2024 being a tough year, the company looked to the future and invested heavily. We are ready, stronger and more efficient for the years ahead.”

Cash reserves dipped from £39.9m to £28.9m as the group funded the Bellshill project and absorbed weaker trading. Staff numbers rose to 522, up from 474.

Pierce warned that while tender activity remained strong, rising input costs and slow project starts would remain headwinds this year.