Contractor’s profit halves as university accommodation scheme completes almost a year late
Pre-tax profit at Shepherd Group has almost halved after a £14m hit on a delayed scheme in Nottingham.
In the year to 30 June 2008, the figure fell 46% from £42.2m to £22.9m despite a 5% increase in turnover from £685m to £718m.
The £47m Trinity Square project in Nottingham, which was to provide accommodation for students at Nottingham Trent university, was built for developer Helical Bar. The final phase was handed over this summer; it was originally scheduled for completion in October 2007.
This delay in the Nottingham project pushed Shepherd’s construction division £1m into the red, on the back of turnover of about £323m.
The £14m hit was announced in the same week in October as Vaughan Burnand, the contractor’s former chief executive, made a sudden departure from the company.
Alan Fletcher, chairman of Shepherd Group, said: “Performance on the vast majority of Shepherd Construction jobs was satisfactory but a major loss arose on one contract. Changes have been made at the business to strengthen the team and to reinforce the culture of risk management.”
The economic slump also pushed its property arm into the red, making a loss of £6.6m on turnover of about £50m.
Its manufacturing division, which includes the Portakabin business, made a pre-tax profit of £31.2m on turnover of about £225m. Meanwhile, its engineering division posted its highest ever profit of £2.5m on turnover of about £122m.