Mowlem blames historical accounting issues for loss and announces departure of finance director Gerald Brown.
Mowlem expects to record a loss of £7.5m before tax for 2004 because of accounting problems relating to its M&E business Mowlem Technical Services.
The contractor said that problems went back as far as 2001 and that debtor and work in progress balances were unlikely to be recoverable.
In the same trading statement Mowlem announced that group finance director Gerald Brown will leave the company. The board said it had identified a replacement and anticipated making an announcement in the near future.
Mowlem has also had to increase capital investment by £410,000 in a Australian railway project which it part owns and operates.
The group said that freight volumes on the Alice to Darwin railway project were not growing as quickly as anticipated resulting in lower than projected revenues and a requirement for additional capital. Mowlem said that the future value of the project would be lower as a result.
Simon Vivian, Mowlem Chief Executive said: 'I have been forced to take some very tough decisions in respect of balance sheet issues across the business but have felt it was in the best interests of Mowlem and its shareholders to take a prudent view.”
“While the issues in Mowlem Technical Services will take some months to resolve, I am confident that we will be able to deliver improved performance and a good result in 2005, with a much clearer focus on better cash generation and cash management across the Group.”
Preliminary results for the year ended 31 December 2004 will be announced shortly.