Problem contracts pull family-owned contractor into the red


Sir Robert McAlpine slumped to a £89.7m pre-tax loss last year, accounts posted online at Companies House today reveal.

Sir Robert McAlpine Limited posted an £89.7m pre-tax loss for the year to October 2014, after posting a slim £4.4m pre-tax profit the previous year.

The heavy loss means the family-owned contractor lost £1 on every £9 of business, with the loss made on £787.8m of turnover. Turnover was broadly flat, up marginally on the previous year’s £780.4m.

In a statement accompanying the accounts, the contractor’s directors said the “significant deterioration in the performance” of the firm was as a result of a “number of poorly performing contracts which have incurred considerable losses”.

The directors said market pressures - including “high cost escalation with a very stretched and limited supply chain”, particularly in London - and “weaknesses within our own operations” had contributed to “delays and cost escalations, resulting in losses on one project in particular”.

Sir Robert McAlpine does not identify which jobs have contributed to its losses in the accounts.

The directors said that in response to the contract losses they had “reviewed and corrected” some processes, namely “risk management during tendering and the management of our design responsibilities and changes”.

Actions taken included a “restructure of our management framework and the introduction of new, robust governance procedures”.

The directors added that they rolled out a “high priority cost efficiency programme and have embarked upon a significant upgrade of our technology to enhance operational productivity”.

Last October Sir Robert McAlpine’s London boss Vince Corrigan exited the firm after 30 years with the company and was replaced in his role by the firm’s director of operations Tony Aikenhead.

When contacted by Building, a spokesperson for Sir Robert McAlpine said: “While the 2014 report and accounts show a loss for the year this was, to a great extent, due to one difficult project.

“Over the last 12 months the company has undertaken a thorough review of its governance procedures, has embarked upon a programme to increase efficiency across all aspects of the business, and has begun a significant upgrade of technology. It has also restructured its London division where, despite a very tough environment, it is delivering a number of high-profile and successful projects. 

“The review and restructure work is already having a positive impact and the company has made an encouraging start to 2015 with some notable project wins throughout the UK totalling in excess of £600m. 

“Sir Robert McAlpine Ltd remains committed to the highest standards of engineering quality, safety and sustainability in all of its activities and projects. The company is confident that this commitment to excellence combined with the business improvements will secure its future success as a key provider of complex building and infrastructure projects.”