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Mon June 21 2021

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Project cost overruns prompt further restructuring at NMC

20 May 13 North Midland Construction had a difficult first quarter with cost overruns on two major contracts pushing it into the red, prompting further restructuring.

Overall group revenue for the first quarter of 2013 was up 3% to £45.2 million but a pre-tax loss of £105,000 was recorded (2012 Q1: £350,000 profit).

“The UK construction sector continued to contract in the first quarter of the year and this, coupled with losses on two major contracts within the building & civil engineering division and poor weather, severely affected the first quarter performance,” the board said in an interim management statement. “Further restructuring of the division is underway,” it added.

One of the two problem contracts is now completed and the other should finish in the middle of this financial year, the board said. Both contracts are subject to contractual claims, which have yet to be resolved.

A good performance from the water business, NMCNomenca, was offset by reduced volumes in the recently integrated highways & utilities division.

Secured workload that is expected to be completed within the current financial year is approximately £140m, up from £134m last year.

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