Contractor returns to profit despite ongoing problems on three building and civil engineering jobs
Work in the water and telecommunications sectors lifted contractor North Midland Construction back into the black in its half-year results, despite ongoing problems on three building and civil engineering contracts.
The firm reported a pre-tax profit of £371,000 in the six months to 30 June 2014, compared to a pre-tax loss of £480,000 in the first half of 2013. The firm reported a pre-tax loss of £6m in the 12 months to 31 December 2013.
The firm reported a slight rise in revenue to £91m in the first half of 2014, up from £89m in the first half of 2013.
Robert Moyle, chair of North Midland Construction, said the group’s profit had been held back by ongoing problems on three “legacy contracts” in its building and civil engineering division.
He said the management of this division had been “restructured” but the “problems [with the contracts] still remain”.
He said: “Progress is being made in the resolution of these contracts, but the timing is proving to be problematical.”
The building and civil engineering division reported an operating loss £0.84m in the first half of 2014, compared to a £1.5m loss the previous year.
Moyle said that when the three problem contracts were stripped out of the group’s results, the group made a pre-tax profit of £1.8m, up from £1.2m the previous year.
The firm’s NMCNomenca division, which works exclusively in the water sector, reported an 8% increase in operating profit to £940,000, up from £870,000, while its revenue rose 10.8% to £41m, up from £37m.
Moyle said the NMCNomenca division won a series of contracts in the water sector during the half-year period, including a £16.5m job to reconstruct the Ambergate reservoir with Laing O’Rourke.
Moyles said the group’s utilities division had “been the beneficiary of increased expenditure by the telecoms companies on broadband infrastructure and this has caused revenue to rise by 15.5%” to £11m, up from £9.5m. The division also reported a rise in operating profit to £140,000, up from £4,000.