Mowlem will spend £5m in 2005 splitting construction services business into three divisions.

Construction group Mowlem has announced a pre-tax loss of £7.4m for the year ended Decemeber 31 2004. It blamed the loss on write-downs and one-off charges including an exceptional charge in its Australian building division.

The company said it had undergone an exstensive review of its businesses and would be creating a dedicated PFI and integrated profits division and splitting the construction services business into three divisions.

Mowlem said it would take a more prudent approach to profit recognition and contract valuation and said it would improve management control of its contracts and introduce a risk assessment team.

Chief executive, Simon Vivian, said: 'We have completed a comprehensive review of Mowlem's businesses and have taken the steps necessary to re-align the Group to deliver results against our committed strategy.

“The Board is confident that the action taken and Mowlem's fundamental strength will enable us to deliver sustainable earnings growth.”

Mowlem said that group finance director Gerald Brown would be replaced by Paul Mainwaring before the end of May.