Shares fall 5% as contractor announces problem with contracts.
Shares in Mowlem dropped 5% this morning to 143p after it announced it was facing a £70m hit on problem contracts, worse than the City was expecting.
Mowlem made the announcement ahead of its half-year results, which will be reported on 28 September and which will include the losses.
It warned that it was “unlikely” to pay an interim dividend to shareholders.
The statement said: “Earlier this year Mowlem initiated a detailed review of its approach to profit recognition and contract valuation. This review is now substantially complete and Mowlem will be adopting more prudent and consistent accounting rules for recognising income on contracts.”
The company’s order book stands at £2.3bn, and recent contract wins include the £450m M1 widening project and the £60m Twickenham contract. It has also been appointed preferred bidder on the £1bn Northwood PFI project for the Ministry of Defence.