Tayside civil engineering firm posts record revenues but profits hit by higher costs

One of Scotland’s best-known civil engineering businesses has reported a dip in profits despite record turnover as higher costs took their toll.

Kilmac directors Athole McDonald (left) and Richard Kilcullen at the Dundee company’s Mid Calder satellite office. Picture: Perthshire Picture Agency

Dundee-based Kilmac said it had increased its turnover by £6.8 million to a record £25.65m in the year to the end of September, 2022. It reported a pre-tax profit of £1.31m, down from £1.59m in the previous 12 months. The firm, which has a 160-strong workforce headquartered at Delta House in Dundee’s Technology Park, handles a wide range of civil engineering projects and acts as a groundworks subcontractor for commercial and social infrastructure and housing projects throughout Scotland.

Director Athole McDonald said: “We are pleased with our overall trading results, with revenues increasing by 35 per cent. The slight drop in operating profit came against a backdrop of material shortages and increasing costs, including the higher wages required to enhance our expanded, high-quality workforce. Crucially, Kilmac also took a decisive step towards future proofing the business and preserving our core values by overseeing a successful employee ownership trust in January last year.”

McDonald, who set-up the business with fellow director and Abertay University classmate Richard Kilcullen, added: “While continuity has been assured, 100 per cent of the shares are now owned by the Kilmac Employee Ownership Trust, which will reward our dedicated and hardworking employees in the years ahead. Prudent management of reserves and funds built up over the previous year paved the way to these carefully planned structural changes.”

The firm has been playing a key supporting role with BAM Construction, the main contractor in the transformation of Perth City Hall into the £26m Perth Museum, which will be home to the Stone of Destiny. Other recent large-scale subcontracted earthworks projects include working with BAM on the Blairgowrie Recreation Centre and, with Robertson Construction, on Monifieth Learning Campus and Dundee University’s Innovation Hub.

McDonald added: “Another major landmark was the decision to look beyond our traditional Tayside and Fife heartlands and opening a satellite office in Mid Calder last year has been fully justified.” The West Lothian satellite, where 20 members of staff are based, has been progressing various projects, including the University of Edinburgh’s Usher Institute with McLaughlin and Harvey.