North Midland Construction PLC Trading Statement (5933A)
February 21 2014 - 2:00AM
UK Regulatory
TIDMNMD
RNS Number : 5933A
North Midland Construction PLC
21 February 2014
North Midland Construction PLC ("the Group")
TRADING UPDATE
21 FEBRUARY 2014
North Midland Construction PLC provides a trading update for the
year ended 31 December 2013.
On 19 November 2013, the Group issued an interim management
statement highlighting that uncertainty over the completion costs
and outturn claim values on two major problematical contracts
within the building and civil engineering division were expected to
have a material effect on the year end results. As a result of
further reviews of the status of these contracts and the
unfavourable settlement of other old projects where reduced payment
had to be accepted, as there was a significant risk of client
commercial failure, the Group expects to report an operating loss
of circa GBP6 million. The highways division also incurred bad
debts on a major project, which are reflected in the overall
result.
Challenging conditions in the construction industry predominated
during the year, with the consequent impact on margins and
profitability. As stated previously, the problematical building
& civil engineering division has been re-organised and the risk
profile severely reduced. Cash flow was maintained, in spite of the
loss incurred and the year-end total was GBP4.8 million in credit,
which is significantly ahead of expectations. The underlying
trading position in the last quarter was profitable, as previously
forecast, but has been seriously impacted upon by the revised
positions taken upon the aforementioned contracts.
The water business (NMCNomenca and Nomenca) performed very well
and both the utilities and highways divisions delivered in line
with expectations.
The 2014 opening order level is strong and market conditions in
some areas are improving. This, coupled with the re-organisation
and re-profiling of the building and civil engineering division,
where improved performance has already been experienced, will
deliver a return to growth this year.
Contacts:-
North Midland Construction PLC 01623 515008
Robert Moyle, Chairman
Dan Taylor, Finance Director
N+1 Singer 0113 388 4789
Richard Lindley
This information is provided by RNS
The company news service from the London Stock Exchange
END
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