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Fraud inquiry proves costly for Sweett

30 Jun 15 Construction consultant Sweett Group has reported a loss for what proved to be an eventful year for the business.

Sweett Group revenue for the year 31st March 2015 dipped to £88.3m (2014: £89.4m) and loss before tax was £1.1m (2014: profit of £2.8m).

The operating loss was £0.7m (2014: profit of £2.3m) and basic loss per share was 2.7p (2014: earnings of 2.8p).

Net debt at the year-end was slightly better than expected at £9.7m, an improvement on the £10.1m at 30 September 2014 but higher than the prior year position of £8.2m.

The year saw the arrival of a new chairman, former Kier boss John Dodds, and a new chief executive. In March 2015 Douglas McCormick succeeded Dean Webster as CEO.

Meanwhile, Sweett’s Middle East business is still embroiled in a Serious Fraud Office investigation and the Asia Pacific operation has been put up for sale.

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The SFO investigation into bribery allegations involving a former Sweett employee cost the firm £1.6m in exceptional administrative expenses during the year.

New CEO Douglas McCormick said: "I joined Sweett Group in March 2015 and have spent the last four months meeting, listening to and engaging with many of our clients and colleagues.  It is clear to me that Sweett Group is an excellent business, which has had a difficult time recently.  The strengths of the group are its loyal, highly skilled people, its brand, and strong market positions, all of which provide a very sound platform for growth.

"The strategic review, which completed in April 2015, concluded that we have solid UK and European businesses which generate cash, with positive working capital dynamics, strong market positions and these geographies will be central to our growth going forward. The sale of our APAC and Indian businesses is progressing well. Once the sale has completed, the board intends to invest further in the UK and European businesses and explore emerging opportunities in the USA and Canada.

"Trading in the UK and Europe, the central pillars to our ongoing strategy is positive and we continue to build on our strong position with a number of high profile contracts recently won. I would like to thank our highly talented team and I very much look forward to working with them as we continue to grow the business with a focus on profitability, cash generation and margins."

The June order book stands at £109m, with £53m being UK and Europe, £49m APAC, £5m MENA and £2m India.  This is in line with the total of £109m in June 2014.

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