Alfred McAlpine is in talks to sell off non-core parts of the Eastern Contracting business it acquired two years ago.

Alfred McAlpine is in discussions with firms believed to include Scottish and Southern Energy Group over the sale of parts of the Eastern Contracting business it bought for £13.3 million in September 2002.

Eastern Contracting was integrated into Alfred McAlpine Utility Services, which forms part of the group’s Infrastructure Services division. Eastern’s wide-ranging areas of expertise included network engineering, business power systems, lighting, infrastructure, utilities and telecomms.

It is understood that Alfred McAlpine wants to concentrate on high voltage works, telecomms and utility works. “We don’t comment on market rumour and speculation,” said a company spokesperson. Sources close to the deal revealed that Alfred McAlpine is in discussions to sell non-core parts of the Eastern Contracting business, primarily low voltage works which fail to generate the profits seen elsewhere in the company.

Alfred McAlpine reported “depressed profitability” in its Infrastructure Services division in its statement following its interim results on 29 July 2004. “In the light of these short-term difficulties we have reviewed our cost base and structure and are confident that we have the right model to maximise future opportunities,” said chair Oliver Whitehead. The company has instigated both compulsory and voluntary redundancies among electricians, including apprentices.

Scottish and Southern Energy’s contracting interests include Southern Electric Contracting.