Problem contracts and office closure costs continue to hit ISG
ISG has posted a 拢27.8m loss on the back of poor performance in its UK construction division.
The international construction services group has announced 鈥渟ignificant impacts鈥� in its final year group results to June 2015 from 鈥渟izeable losses鈥� on a 鈥渓imited number鈥� of contracts taken on during 2012 and 2013 by the UK construction division. ISG said the contracts were now 鈥渓argely closed out鈥�.
The firm also made further provisions against the closing of its London luxury residential business and Tonbridge office, to the tune of 拢8.5m and 拢4.8m respectively. This followed ISG making provisions of 拢18m against the closures in its half year results in March.
Commenting on the latest provisions, ISG said: 鈥淭hese covered unexpected cost overruns and delays on the remaining four live projects, unanticipated sub-contractor insolvencies and a mixed outcome of final account settlements and adjudication decisions.鈥�
ISG said that when exceptional costs were stripped out, the firm made an underlying pre-tax profit of 拢7m over the year.
Revenue for the group rose to 拢1.6bn, up from 拢1.5bn in 2014, while its order book increased 14% to 拢1.1bn, up from 拢984m in 2014.
Commenting on the results ISG chief executive David Lawther (pictured) said: 鈥淚t has been a challenging year for ISG, with the Group performance significantly impacted in the first half by the losses in our UK Construction division.
鈥淲e delivered a significantly stronger second half performance, with good results especially in our specialist fit out, engineering services and retail businesses.
鈥淲e believe that the poor performance and painful restructuring of the UK Construction division is now behind us, and with the outlook for most of our key markets remaining strong, we expect a much improved overall performance for the Group in the year ahead.鈥�
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