好色先生TV

The problem jobs that have forced Morgan Sindall to write-off nearly 拢15m are linked the firm鈥檚 acquisition of Amec鈥檚 construction business, 好色先生TV understands.

In its full-year results published yesterday Morgan Sindall said it had made a 拢14.7m provision for costs related to four problem contracts, which dragged the construction business into the red.

Morgan Sindall said the jobs were 鈥渉istoric鈥� with issues relating to two of the jobs now resolved, but the remaining two remained outstanding.

Speaking to 好色先生TV yesterday, Morgan Sindall chief executive John Morgan said the jobs were 鈥渧ery old鈥� but declined to comment further.

However, it is understood that the problem jobs are contracts inherited by Morgan Sindall when it made the acquisition of Amec鈥檚 construction business in 2007.

Morgan Sindall bought Amec鈥檚 construction business and development arm for 拢26m in 2007. In its 2008 accounts Morgan Sindall wrote-down the value of the acquisition by 拢60.5m to account for liabilities attached to the Amec construction business.

Yesterday John Morgan said he had no regrets about the Amec acquisition, saying it had doubled the size of the Morgan Sindall business and made the firm a real player in the regeneration sector, which is now a key part of Morgan Sindall鈥檚 strategy.

He said: 鈥淸The acquisition] took us from being a medium contractor to a major contractor and it gave us a big leg up in the regeneration[sector].鈥�

鈥淚t didn鈥檛 cost us a huge amount of money, we didn鈥檛 have to go to the market for any more money, so it didn鈥檛 dilute existing shareholders interests, it鈥檚 not been completely plain sailing but no acquisition is, but we鈥檙e now in a different space.

鈥淚f we hadn鈥檛 done that acquisition people would have thought: 鈥極h, Morgan Sindall, will I go and see them? They鈥檙e a bit small. But now we鈥檙e a bigger player.鈥欌��

鈥淚t鈥檚 made a big difference on our ability to win PFIs; huge amounts of skill that we didn鈥檛 have; it鈥檚 meant we could do bigger jobs, more complicated jobs 鈥� It鈥檚 doubled our size 鈥� it was a game changer.鈥�

This month 好色先生TV revealed Amec and Morgan Sindall are locked in a legal dispute over a 拢16m hotel project in Liverpool, centring on the liability for 拢8m in costs arising due to defects on the project, which Amec argues was transferred to Morgan Sindall as part of the sale of its construction business to the firm.

The firms are also embroiled in a long-running dispute with the Ministry of Defence over the liability for nearly 拢100m in cost overruns on their Faslane nuclear submarine jetty project in Scotland.

However, it is not clear if either of these two jobs are among those that led to the 拢14.7m provision in Morgan Sindall鈥檚 results.

A Morgan Sindall spokesperson said: 鈥淲e do not comment on individual contracts.鈥�