TIDMNMD

RNS Number : 1962T

North Midland Construction PLC

19 November 2013

North Midland Construction PLC ("the Group")

19 November 2013

Interim Management Statement

The Group is today issuing its Interim Management Statement covering the period from 1 July 2013 to 19 November 2013, as required by the UK Listing Authority's Disclosure and Transparency Rules.

There has been a modest upturn in UK construction activity in the last quarter and it is heartening to report a 4.3% increase in Q3 revenue, over the comparable period in 2012, to GBP39.85 million. Continuing problems in the Building and Civil Engineering division have contributed to a further Group loss in Q3 of GBP0.43 million (Q3 2012 loss GBP0.34 million). However, September returned to profitability, delivering a Group profit of GBP0.23 million in the month.

The Building and Civil Engineering division has been totally restructured, but performance is still suffering from the legacy of old loss-making contracts. Further delays have been experienced on two major projects and these have had a significant effect on profitability. Current contracts, with the exception of these two major schemes, which are still ongoing, are trading profitably.

The Nomenca subsidiary continues to perform well and is delivering in line with expectation.

NMCNomenca is performing ahead of management expectations and will deliver an enhanced result for the year compared with 2012. The division is hopeful of a significant order for the AMP6 programme in the near future. The E5 consortium has now completed circa 70% of the programme and the prospects continue to look favourable.

The Highways division has experienced a significant increase in tender opportunities and has been successful in securing two new frameworks. However, delays in commencement of projects have had a material effect and revenues are currently down for the year so far. A loss of GBP0.06 million was delivered in Q3 (Q3 2012 loss GBP0.06 million).

The Utilities division has delivered in accordance with expectations and a profit of GBP0.09 million was declared for the quarter. Settlement of a significant outstanding account has been satisfactorily achieved, with a consequent improvement in cash flow. The current framework with Carillion/Telent for BT work has been extended for a further two years and will incorporate the BDUK programme, which should lead to enhanced revenues.

Cash collection remains particularly difficult in certain sectors of the business and is being exacerbated by the contractual situation being experienced on some contracts. There has been a net cash outflow during the quarter, but the Group continues to operate well within its bank facilities.

Nomenca Limited has recently been successful in securing a SEMD framework for United Utilities for a 3 year + 2 period. Co-location is required for the staff from both organizations. To accommodate this and further anticipated expansion, new premises closely sited near to the Group's existing premises, have been purchased in Warrington, for GBP1.0 million.

An improvement on the half year result is still anticipated. However, there is considerable uncertainty over the completion costs and the outturn claim value of the two major problematical contracts and these could have a material effect on the result for the year.

Contacts:-

   North Midland Construction PLC                                 01623 515008

Robert Moyle, Chairman

Dan Tayor, Finance Director

   N + 1 Singer                                                                0113 2410126

Richard Lindley

This information is provided by RNS

The company news service from the London Stock Exchange

END

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