19th May 2014 10:35
LONDON (Alliance News) - North Midland Construction PLC said Monday it swung to a pretax profit in its first quarter, buoyed by a strong performance by its water business, as the value of the firm's secured workload for the year increased.
The company recorded a pretax profit of GBP234,000 for the quarter, compared to a GBP105,000 loss for the comparable period last year. Group revenue declined by 1.5% for the period, coming in at GBP44.5 million, down from GBP45.2 million in 2013.
In an interim management statement for the period January 1, 2014 to May 19, 2014, the civil engineering and building contractor said the quarter began slowly, particularly in its Highways & Utilities division, however, the water business, NMCNomenca, delivered strongly, said the firm, with pretax profit up to GBP148,000 against GBP105,000 last year, though revenue dropped 4% to GBP9.8 million from GBP10.2 million in 2013.
North Midland's restructured Building & Civil Engineering division performed much better, it said, albeit on lower volumes, adding that the resolution of two problematic contracts that caused the loss in the previous financial year remains outstanding.
Looking ahead, the company reports a stronger pipeline than in the comparative period last year, with secured workload expected to be completed within the current financial year at approximately GBP160 million, compared to GBP140 million. North Midland said, "At this stage, this total only includes firm orders placed under the framework contracts. These orders will increase, as there is good visibility of the projected level of annual expenditure on the major frameworks."
North Midland said the board is cautiously optimistic that the improved performance can be maintained, notwithstanding the currently unknown resolution of the problematic contracts.
In March the firm reported a full-year pretax loss of GBP5.97 million for 2013, compared with a profit of GBP710,000 in 2012, 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.
Shares in the company were untraded at 121.5 pence per share Monday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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