Mowlem’s shock restructuring comes after a tumultuous year for the firm.
In June 2004 the firm issued a profit warning stating that rises in labour costs and subcontracting in New South Wales, Australia, would lead to an exceptional charge of £12m in its interim results.
Last December the firm issued another profit warning, this time predicting full-year profits would be hit by £8m of costs on some support services contracts and a £15m write-down on Australian contracts.
Chief executive Simon Vivian took over in January and instigated a review that has since cut 200 jobs.
In February it appointed a group finance director, Paul Mainwaring, to replace Gerald Brown.
In the same statement to the stock exchange in February, the firm revealed “historic accounting issues” within its mechanical and electrical division would contribute to a £7.5m loss in 2004.
Then it was hit by a double whammy when it was thrown off the Bath Spa project in April and the next month was banned from carrying out any more maintenance work for Network Rail after it was found to have incorrectly completed a job on the West Coast Main Line.
An inspection on 300 yards of track renewal concluded that Mowlem had used the wrong clamps and equipment.
In the same month, Mowlem chairman Charles Fisher announced he would step down from the board after 12 years’ service.
In July the firm issued another profit warning, saying it would take a £20m hit on contracts. This week that figure was revised to £70m.