23rd Aug 2013 08:20
LONDON (Alliance News) - North Midland Construction PLC said Friday it had swung to a half-year loss due to continued problems in its building and civil engineering division.
The UK provider of civil engineering, building, mechanical and electrical services to public and private organisations said it expected to return to profit in the second half of the year, but still cut its interim dividend payment to 1.0 pence per share from 1.5 pence the year before.
North Midland registered a pretax loss of GBP480,000 in the six months to June 30, compared to a profit of 115,000 the same period a year before. The loss occurred despite revenue increasing 19% to GBP89.4 million from GBP74.9 million previously.
The company said the building and civil engineering division swung to a loss of GBP1.58 million from a profit of GBP670,000 the year before due to a problematic contract still not being completed and cost overruns at two other projects.
North Midland said the division is being reduced in size, resulting in redundancy costs.
"The results are extremely disappointing, particularly in view of the increase in group revenue," Chairman Robert Moyle said in a statement.
A spokesman for North Midland told Alliance News the problem contract is private-sector building contract that is experiencing cost overruns. He said the contract will be the subject of a legal claim, and so he said the company couldn't provide the name of the counter-party or other details.
Meanwhile, North Midland said Daniel Taylor joined the company's board Friday as finance director and company secretary. Taylor, an outsider whose appointment was announced in May, replaces Michael Garratt, who retired Friday.
By Tom Waite; [email protected]; @thomaslwaite
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