Legal and restructuring costs and delayed contracts causes Birse pre-tax profit to fall to 拢270,000.
Profit at Birse Group has been hit by a legal cost of 拢2.9m for the year ended 30 April 2005. The sum relates to litigation with Citibank, which also cost the group 拢4.4m last year.
Pre-tax profit without the exceptional legal cost fell 50% to 拢3.3m. Birse blamed delayed contract starts and the continued reorganisation of Birse Build, which made pre-operational losses of 拢7m.
In a joint statement chairman Peter Watson and group managing director Martin Budden said: 鈥淚n our core engineering operations the transition to new customer procurement practices has suppressed production volumes in the year and also reduced demand for the hire of heavy duty plant.鈥�
Birse was opptimistic that the lost production would be recovered in the future and said that a record order book of 拢507m in core operations would 鈥渁dd impetus to the group鈥檚 underlying forward momentum.鈥�
On May 9 Birse completed the sale of The Cabin Company. The net proceeds of 拢5.3m will contribute 拢1m of pre-tax profit towards the 2005/2006 results.
