The Courier & Advertiser (Fife Edition)
One of the key firms behind Fife school development
Tayside-based civil engineering contractor Kilmac is battling through the impact of Covid-19. T he business, which employs around 100 people, originally had high hopes for 2020.
Bosses at the firm had anticipated that it would enjoy record financial turnover, but that was before the virus struck.
Joint managing director Athole McDonald said: “The sector was going well. Given the number of projects we had in the pipeline, we were confident we would enjoy a memorable year.
“It’s been unforgettable, but unfortunately not for the reasons we had anticipated.”
He added that Kilmac is reasonably well placed to navigate its way through the pandemic in the months ahead.
Mr McDonald also praised the government furlough scheme for being a lifesaver for the civil engineering industry.
“Our overheads at Kilmac run at about £250,000 a month,” he said.
“We wouldn’ t have survived month after month of a lockdown, so the support was vital.
“We took an early decision to shut down in March, with the agreement of clients.
“We only ke p t on a skeleton crew.
“We had a few key projects to complete and a third of the workforce came back in April after five weeks off before the rest returned at the start of June.
“Our biggest project right now is the new Madras College at St Andrews, which is worth around £7 million to us.”
Mr McDonald and Richard Kilc ullen, the other joint managing director, originally met on an Abertay civil engineering course.
Then, 16 years ago, they took the plunge to create Kilmac.
Mr McDonald said: “We saw an opportunity to deliver fast-tracked groundworks for a wide range of projects across Tayside.
“We were in good managerial jobs, but didn’t regard it as a high- risk move to go it alone.
“We pencilled in a turnover of £1.5 min our first year and it was a good time to launch a company – maybe not as good as 20 years earlier, but certainly a lot better than nowadays.”
Kilmac has experienced rapid growth since it was formed.
But Mr McDonald added: “We were always conservative in our management strategy and never exceeded our capabilities in terms of delivery.
“We didn’t bite off more than we could chew.
“That philosophy has served us well down the years.
“Also, ensuring we have always had cash in the bank has been important in providing stability for ongoing, planned growth.
“We were never tempted to take cash out of the business and rely on bank borrowings.
“We knew the importance of cash flow to sustain projected growth and it has always been important to deliver what we promised to our clients.
“T hat reputation for reliability has been crucial in the development of Kilmac.”
Mr McDonald said the company has expanded its operations towards Edinburgh and Aberdeen in recent years, but Tayside and Fife is still very much the core of the business.
“This is where our labour force is concentrated, operating from headquarters at Delta House in Dundee.”
Kilmac’s turnover last year was £13m and had been projected at around £18 min 2020.
But the pandemic has now cut this year’s expected figure by about £6m.
Mr McDonald said: “This year will now probably be a break-even year at best, with the profit being swallowed by shutdown costs.”