Chief executive blames legal battles for poor figures but looks forward to consistent profits in the future.
ontractor Birse has claimed that its litigation troubles are behind it after declaring a £2.1m loss for the financial year 2000/1.

Peter Watson, chief executive of Birse, said a pre-tax profit of £4.6m for the second half of the year proved that the group was well set up for the future.

Figures for the first half of 2000/1 were affected by legal battles over a total of £24m in claims. The company reported a £6.7m loss for that period.

He said the group was now poised to make consistent profits. "I am very optimistic and pleased with the result. We have an order book better than it has ever been and margins better than they have been for 10 years. We have come from a pretty grotty background into profit."

The group made pre-tax profit of £4.1m for the financial year 1999/2000.

Watson said litigation over one particular contract – the Lower Rhymney Valley relief road project – had now been settled and four out of seven other projects subject to legal action had been resolved.

The group was forced to write off £16m late last year because of a dispute over the Priory Meadow shopping centre in Hastings, East Sussex.

Watson said his focus was now on turning around the group's process engineering arm, which lost £9m in the year to 30 April. He added that increased work in the water sector would move it into profit.

He praised the rest of the company's construction divisions – the building and civil engineering arms – which made £3.9m and £826,000 operating profit respectively.

Watson highlighted increased turnover in the two arms, which led to a more efficient recovery of overheads, and the lack of loss-making contracts as the principal reasons for the improvement.

Birse Construction saw turnover increase 14% to £414m for the year. Overall group turnover was £423m.

John Elders, managing director of Birse Construction, said the division was aiming to get civil engineering work in the booming rail and underground sectors.

He added that the building division was hoping to expand into three sectors – student accommodation, leisure and hotels.

The expansion will be overseen by Ian Russell, who has been appointed hotel and leisure director.