13th Aug 2015 07:26
LONDON (Alliance News) - North Midland Construction PLC on Thursday said its pretax profit fell in the first half of 2015 due to a couple of troublesome legacy contracts in its civil division, but posted a strong rise in revenue and said its underlying trading is in line with its expectations.
North Midland said its pretax profit for the first half to the end of June was GBP136,000, compared to the GBP322,000 it posted a year earlier, primarily due to writedowns it had to book on legacy contracts in its civils division. The group said it is close to completion on those legacy deals but said execution risks still remain and could still pose further downside risks.
But the profit was also dragged lower by a GBP829,000 loss made in its utilities division, swung from a profit a year earlier, due to loss on its Carillion Telent contract. The group has now cancelled its Carillion Telent contracts in Lincolnshire, Shropshire and Yorkshire and is now only focused on the core East Midlands portion of the deal.
The problems with the legacy contracts offset an 18% rise in revenue for the group in the first half, up to GBP107.2 million from GBP91.0 million.
The company is not paying an interim dividend, in line with the year earlier.
North Midland shares were down 5.5% to 128.00 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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