1st Apr 2016 06:49
LONDON (Alliance News) - North Midland Construction PLC on Friday said it swung to pretax profit in 2015, although the company said profit would have come in much higher were it not for the resolution of its legacy contracts proving weaker than expected.
North Midland, which provides civil engineering, building, mechanical and electrical services, posted pretax profit of GBP606,000 for the year ended December 31, improving from a loss of GBP3.0 million the previous year, after revenue rose to GBP217.6 million from GBP193.2 million.
This sales growth came largely from its highways division, which saw revenue boosted by 55% to GBP38.8 million from GBP25.0 million, and from its utilities division, with revenue growth of 49% to GBP32.6 million from GBP21.9 million.
However, North Midland said its profit was hit by the closing out of major legacy contracts, including those within its civil engineering division, which resulted in a loss of GBP830,000 for the year on revenue of GBP7.8 million, and within its utilities division, where a loss of GBP2.0 million was incurred.
As such, underlying pretax profit, which strips out the effect of the legacy contracts, was GBP4.5 million, up from GBP4.4 million the previous year, when profit also was hit by legacy contract losses.
North Midland said that, due to the losses from these contracts, it was not recommending a dividend for 2015. No dividend had been recommended for 2014.
North Midland said its secured order book for the current financial year stands at GBP181.0 million, up from GBP155.0 million a year earlier, which it said "represents a significant proportion of the 2016 budget".
"This level of secured revenue, along with the forecasted level of orders likely to be received under the existing frameworks, coupled with the underlying performance, is encouraging. This leads the board to be cautiously optimistic for the future," the company said.
By Hannah Boland; [email protected]; @Hannaheboland
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