KUALA LUMPUR; IJM Corporation Berhad has proposed to acquire a 50 per cent stake in JRL Group Holdings Ltd for £50 million (about RM283 million) for further expansion into the United Kingdom’s (UK) construction sector.

Datuk Lee Chun Fai, group chief executive officer and managing director (MD) of IJM, said, “This investment is a strategic step forward for IJM, strengthening our construction portfolio and leveraging JRL’s technical expertise and market presence in the UK.

“Together, we aim to unlock new growth opportunities, deliver transformative projects, and create meaningful synergies in a key international market.”

In a statement, IJM said that the transaction involves the subscription of new ordinary shares in JRL, representing 50 per cent of the enlarged equity interest in the company.

The proceeds from the investment will be used to strengthen JRL’s balance sheet, enhance liquidity for working capital, and support future growth.

IJM said that this investment aligns with its growth strategy to diversify revenue streams, develop adjacent and synergistic businesses, and expand its geographical footprint.

“By integrating IJM’s development expertise with JRL’s proven contractor capabilities, this strategic move optimises the value chain, enhancing project execution and bolstering IJM’s foothold in the UK market,” IJM said.

JRL is a diversified construction group offering integrated solutions across piling, groundworks, concrete frames, architectural design, and mechanical and electrical services.

The UK-based contractor is recognised for its expertise in rail-adjacent and over-railway developments.

JRL returned to profit in 2024, recording revenue of £311 million (about RM1.76 billion) and a pre-tax profit of £9 million (about RM50.8 million) for the first six months of its financial year.

Driven by operational improvements, this financial recovery positions JRL as a more resilient and competitive player in the UK construction market.

JRL has an order book of £1.5 billion (about RM8.5 billion), which provides earnings visibility for the next three years and access to a robust pipeline of projects.

IJM said that this complements its outstanding RM6.4 billion order book.

Meanwhile, IJM said that JRL’s proven expertise in rail-adjacent and over-railway developments also supports IJM Land, IJM’s property arm, in its joint venture with Network Rail Property, it said.

“This JV focuses on urban regeneration and mixed-use over-railway developments across multiple strategic sites in London, with a combined gross development value (GDV) of over £3 billion (about RM17 billion).”

Since 2021, JRL has also ventured into property development, building a portfolio of seven sites comprising build-to-rent and co-living units, with an estimated GDV of £700 million (about RM3.96 billion).

JRL’s construction arm, Midgard, served as the main contractor for IJM Land’s maiden UK property development, Royal Mint Gardens Phase 1, completed in 2019. This phase comprised high-rise residential developments built over active railway lines at Tower Hill, including the Docklands Light Railway.

Midgard was recently appointed as the contractor for Phase 2, which includes a 463-room Wilde Aparthotel operated by Staycity, alongside 79 residential units.

“JRL’s track record with Royal Mint Gardens Phase 1 demonstrates their ability to deliver complex and technically demanding projects. Their expertise complements IJM Land’s ongoing UK projects, enhancing our capability to deliver quality developments that drive long-term growth,” Lee said.

JRL’s MD John Reddington said, “We are excited to align with IJM, a leading construction group from Malaysia. This joint venture strengthens our position and provides the opportunity to build on our success with projects like Royal Mint Gardens Phase 1 while advancing our pipeline of developments in the UK.”

Source: NST, November 25, 2024