Civil engineer reports 拢6m pre-tax loss as problem jobs take their toll
Delays and cost overruns have pushed North Midland Construction 拢6m into the red.
In its results for the year to 31 December 2013, the firm posted a pre-tax loss of 拢6m, down from a pre-tax profit of 拢710,000 the previous year.
The loss was expected after North Midland issued a profit warning last month that said it was likely to report an operating loss of 拢6m.
In a statement to the City, the firm said that the loss was caused by a 鈥渇ailure to achieve budgeted revenue鈥�; 鈥渄elays in the completion of two major problematical contracts鈥�; and 鈥渦nfavourable settlement of old projects where reduced payment was accepted鈥� in its building and civil engineering division.
North Midland Construction鈥檚 building and civil engineering division - the only division of its five to report a loss - reported an operating loss of 拢9.5m in 2013.
In 2012 the division reported an operating loss of 拢1.1m.
The firm said: 鈥淭he division has been totally restructured and the risk profile of new contracts has been reduced.
鈥淪ignificant claims for losses on the problematical contracts are currently being completed and pursued, but conclusion will not be achieved until completion has been finalised.
鈥淭he market remains extremely competitive, but the level of enquiries is increasing.
鈥淥perational performance has improved, as a result of the restructure and the ongoing projects, which are now predominantly in the power and construction sector, have returned to profit at site level.
鈥淭he emphasis going forward is to secure blue chip clients with a high level of repeat business.鈥�
Meanwhile, the company鈥檚 utilities arm, which has framework contracts with BT, Vodafone and Carillion/Telent, returned to profit.
The division reported an operating profit of 拢220,000 in 2013, up from an operating loss of 拢501,000 in 2012.
The group reported a rise in revenue to 拢178m in 2013, up from 拢169m in 2012.
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