Building firm back to profitability

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NOTTINGHAMSHIRE building firm North Midland Construction PLC (NMC), has announced a return to profitability in its half-year results.

The Huthwaite-based business saw revenue up 1.5% to £90.98m from the £89.39m that was reported for the first half of 2013.

Profits before tax for the first half of 2014 are £0.37 million compared to a loss before tax of £0.48 million for the same period last year.

The underlying profit before tax of the business, prior to problematic contract provisions was £1.78 million, compared to £1.24 million for the first half of 2013.

Problems still remain in the Building & Civil Engineering (BCE) division, particularly with the resolution of three legacy contracts.

This has resulted in an operating loss of £0.84 million for the period, however, this compares to a £1.58 million loss for the same period last year. The division’s revenue has reduced by 31.3% to £11.72 million too.

The firm says progress is being made to resolve the problematic contracts and the division has been restructured under new management.

The underlying business is now trading profitably and the division continues to perform well for long-standing clients including Tata Steel, WPD and East Midlands Housing Association. A £3 million contract to build an office block in Grove Park, Leicester, was recently awarded to the division, with work due to begin on the project this September.

The firm has also secured a lucrative £16.5 million order to reconstruct Ambergate Reservoir, in conjunction with Laing O’Rourke.

NMC Chairman Robert Moyle said: “The results demonstrate the further progress that has been made since our Interim Management Statement released on 19 May 2014.

“The return to profitability is encouraging and orders received to date to be executed this financial year stand at £178 million.

“Maximum effort is being expended to bring the legacy contracts to conclusion and settlement and whilst the Group continues to trade profitably, there is still potential risk in the resolution of legacy contracts.”