The contractor made a 拢208.5m provision for the job
Amey has revealed it made a 拢189.9m pre-tax loss last year after taking a 拢208m hit on a problem road job in Birmingham.
The infrastructure specialist, which is responsible for maintaining highways for Birmingham city council but has been involved in a long-running legal dispute with the local authority about the contract, made a 拢208.5m provision against the job.
Andy Milner, Amey鈥檚 chief executive said: 鈥淲e have been involved in a dispute with Birmingham City Council over the last 36 months regarding the scope of contractual obligations in the core investment period, and recent communications from the council make it clear that an exceptional provision of 拢208.5m needs to be accounted for in our 2017 results.
鈥淭his is in respect to undertaking additional investment during the initial phase of the contract as well as expectation of high deductions and penalties to be applied by the council.
鈥淒iscussions are on-going with the council and the provision made is expected to cover all outcomes anticipated at this current time.鈥�
Amey was named preferred bidder for the 拢2.7bn PFI contract with the council in 2009 to look after its highways for 25 years.
By 2014 the two parties were disputing details in the contract and have been in and out court for the past four years.
The ongoing legal dispute was heard in the court of appeals earlier this year, which found in favour of the council.
Amey鈥檚 拢190m loss represents a further deterioration in the company鈥檚 financials. It recorded a 拢43.9m pre-tax loss in 2016.
Setting the Birmingham road job aside Amey recorded a pre-tax profit of 拢14.7m last year, which was an improvement on 2016 where the firm recorded a pre-tax loss of 拢34m excluding exceptionals.
The firm saw a slight contraction in its revenue which fell from 拢2.59bn to 拢2.58bn.
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