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23 Feb 2012 14:57
North Midland Construction PLC (the "Group")
Trading Update
North Midland Construction PLC provides a trading update for the year ended 31 December 2011.
On 18 November 2011, the Group issued an Interim Management Statement highlighting that the deterioration in the economic climate was having a significant adverse effect on certain sectors of its business, including the Building subsidiary, and detailed a resultant one-off non cash accounting adjustment against the value of goodwill. This will be offset by the exceptional profit of £1.25 million recognised in the first half of the financial year as a result of the reduction in the OFT fine. Losses within the Building subsidiary were primarily due to major delays and cost overruns on a significant project. A further review of this particular project has revealed that the completion date has further extended, with subsequent increased anticipated cost overruns of £1.5 million, which must now be provided for. These costs will be recognised in the 31 December 2011 results for the Building subsidiary. A significant claim for losses incurred on this project is currently being pursued. A major re-organisation has been undertaken within the Building subsidiary, which is now under new management.
The enhanced loss within the Building subsidiary will have a major impact on the Group's overall results for the year ended 31 December 2011, which will consequently be significantly below market expectations. The results of all the other divisions in the Group are in line with expectations for the year ended 31 December 2011.
The overall Group order book for 2012 currently stands at £120 million and the Group is trading in line with expectations for the current financial year.
Contacts:-
North Midland Construction PLC Tel:- 01623 515008
Robert Moyle, Chairman
Mike Garratt, Finance Director
N + 1 Brewin
Sandy Fraser Tel:- 0131 5290272
Richard Lindley Tel:- 0113 2410126
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