North Midland Construction (NMC) is in dispute with Cyden Homes Ltd over who should be held liable for delays to a house-building project in Lincolnshire. A ruling in favour of Cyden Homes by the Technology & Construction Court at the end of 2017 is now being appealed by NMC.
The costs of all this are such that the NMC board has decided to make a further provision against the outstanding debt and reduce its earnings expectations for 2017.
“The directors now believe that the group will break even in the second half, but be profitable for the year as a whole at the pre-tax level,” the company said in a trading update to shareholders.
Chief executive John Homer said: "It is disappointing that focus on a healthy underlying group performance from our continuing operations, which we expect to report on in late March 2018, appears to continue to be diverted by the outcome of this remaining legacy contract.
“Going forward we have a good order book and a positive cash flow profile. We remain confident that our emphasis on careful contract selection, effective governance and continued investment in our employer brand will deliver the results required."