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NMC warns on profits

18 Feb 16 North Midland Construction’s long-running problems with legacy contracts have nearly all been resolved, but not in a good way.

In a trading statement to shareholders this morning North Midland Construction said that it was having to take another £3.1m hit on the contracts but it still expected to report a profit for 2015.

There is still “one problematical legacy contract” to be sorted out.

NMC is no stranger to profits warnings. It lost £6m before tax in 2013 and £3m in 2014. However, ror the first half of 2015 it made a pre-tax profit of £136,000 on £107m of revenue.

In its statement today the board said: “The resolution of certain previously referred to legacy contracts across the group has now been concluded and the settlement figures expected have not been achieved, resulting in additional total losses of £3.1 million.  This leaves only one problematical legacy contract to conclude.

“Despite these negative settlements, due to strong underlying trading, management still expects an unadjusted profit for the full year, albeit significantly below previous management expectations.

“The order book for completion this year currently stands at £195m and the board is confident about the outlook for the year.”

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