16th Oct 2014 08:20
LONDON (Alliance News) - North Midland Construction PLC on Thursday said it is expecting to post a loss for the year on the back of a negative settlement of a legacy contract, though it said underlying profitability and revenues are improving and ahead of expectations.
The group said the resolution of the legacy contract in its Building & Civil Engineering arms has been concluded and said it did not achieve the settlement figures outlined in its half-year statement in August. North Midland didn't provide the name of the counter-party to the contract.
It said the negative settlement on the case will result in GBP700,000 in additional losses. North Midland has also made provisions of GBP2 million to cover potential settlements of three other legacy contracts still in dispute.
Due to the negative settlement and the provisions, the group said it now expects to post an unadjusted loss for the full year.
But the company said its underlying profitability and revenue in the current year are improving and ahead of its expectations. The group said the settlement has resulted in a cash inflow in the year of around GBP1.5 million, with another GBP900,000 expected before the end of the year, meaning its net cash position will be in line with expectations.
North Midland shares were untraded on Thursday, quoted at 117.00 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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