28th Mar 2014 12:06
LONDON (Alliance News) - North Midland Construction PLC Friday said it swung to a pretax loss in 2013 as its building and civil engineering unit was hit by cost overruns on some contracts and unfavourable settlements on others where clients had got into financial difficulties.
The company reported a pretax loss of GBP5.97 million for 2013, compared with a profit of GBP710,000 in 2012, as it booked losses of GBP9.55 million for the contract issues. Its revenues rose to GBP177.6 million, from GBP168.9 million.
"The division has been totally restructured and the risk profile of new contracts has been reduced," the company said of its building and civil engineering unit.
"Significant claims for losses on the problematical contracts are currently being completed and pursued, but conclusion will not be achieved until completion has been finalised. The market remains extremely competitive, but the level of enquiries is increasing," it added.
On a more positive note, it said its utilities unit had returned to profitability, while its secured workload for 2014 stands at about GBP150 million.
"These orders are expected to increase and there is good visibility of the projected level of expenditure on the major frameworks," it said in a statement.
"The restructuring of the Building and Civil Engineering division, coupled with the completion of the two major problematical contracts, along with the expansion of the water business and improving market conditions, leads to confidence in a return to profitability in the next financial year," the company added.
North Midland Construction shares last traded at 123.5 pence.
By Steve McGrath; [email protected]; @SteveMcGrath1
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