Firm to now sink 拢16.5m into red this year

Civils specialist NMCN has told investors that its losses from a series of problem water contracts will now be 拢1.5m more than expected.

In October, the firm, previously known as North Midland Construction, said a review of its major contracts had uncovered several issues which it said will see it rack up a pre-tax loss of between 拢13m and 拢15m for 2020.

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NMCN will nosedive 拢16.5m into the red when it reports its 2020 results next year

But in a trading update this morning, the firm said this figure had now gone out to 拢16.5m.

It added a review had discovered accounting errors on five water contracts which meant it was restating its 2019 pre-tax profit down from the reported 拢7.4m to 拢2.1m.

It said the difference of 拢5.3m would be added to the 拢11.2m it would be booking as a pre-tax loss for this year. The 拢11.2m includes 拢1.2m for the final settlement of a legacy contract, it added.

In the update, the firm said around 拢20m of work, originally scheduled to be completed this year, will now not be finished until 2021 because of delays caused by the covid-19 pandemic. Last year, NMCN posted revenue up 19% to 拢405m.

It said its major loss-making water contract would be completed early next year while two other divisional businesses, highways and building, had been hit by problem jobs and delays respectively. Its telecoms arm had been performing well, it added.

The firm expects to announce a replacement for former chief executive John Homer, who left in September, in the first quarter of 2021.

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