Contractor expects “materially larger loss” than previously anticipated due to problem contracts
North Midland Construction has issued a profit warning as it continues to endure problems with legacy contracts secured at the height of the recession.
Last August, the contractor reported a pre-tax profit of £371,000 for the six months to 30 June 2014, but chairman Robert Moyle (pictured) said profit had been held back in the second half by ongoing problems on three outstanding contracts in its building and civil engineering division.
The management now expects a “materially larger loss” before tax for the full year to 31 December as a result of these contracts.
However, it added that the underlying profitability and revenue for the year is likely to exceed management expectations.
At year end, net cash was £1.7m and cash balances were £5.3m. The business says it has sufficient funds to support its growth going forward.
The full year audited figures will be released to the market on 20 April 2015.