For the year to 31st October 2020 – a year marred by the Covi pandemic – Sir Robert McAlpine’s turnover fell 19% to £819.5m (2019: £1,009.2m).
The £26.8m pre-tax loss in 2020 compares to a profit of £14.5m in 2019.
Exceptional items for the year included a £5.1m charge for Covid-19 related restructuring.
McAlpine has also taken the precaution of setting aside a rather large sum in anticipation of legal battles ahead. Chief financial officer Leighton Moore explained: "In addition to the direct impact resulting from the reduction in revenue, project profitability has been impacted by additional
irrecoverable costs through the reduction in productivity, extended delivery programmes, and operating costs to ensure our projects are Covid-19 safe. Following a detailed risk review of the business in response to the pandemic, a further net increase of £14.8m in cost provisions was also made in respect of anticipated additional potential costs on old contracts, to help deal with the increasingly litigious environment in respect of defect rectification."
However, year-end cash balances remained healthy at £96.7m, with no debt, and the directors are sounding confident of no lasting damage.
When Covid arrived and much of the industry temporarily shut down, McAlpine was already engaged in a strategic review to evaluate business priorities and reinforce its long-term resilience. Together with its efforts to mitigate the impact of the pandemic, this led the company to restructure and focus more on key sectors, working with long standing clients, consultants and supply chain partners.
As a result of these measures, it says, productivity increased, and early indicators suggest that the company is on track to deliver to its full year budget for the 2020/21 financial year, with revenue and profit returning to pre-pandemic levels.
Chief executive Paul Hamer said: “This unpredictable financial year has been incredibly challenging for our people, our industry, the wider economy and society at large. Yet, despite this, we remain focused on constructing a brighter future.
“Our positive outlook is built on a solid order book and healthy pipeline of opportunity alongside the hard lessons learned during the pandemic and the sheer brilliance of our people innovating each day to keep our projects delivering safely. This has helped us to forge strengthened relationships with our clients and supply chain partners.
“More than ever, we remain committed to becoming the best place to work, placing Sir Robert McAlpine as a flexible, agile and inclusive business that welcomes everyone. I am resolute that these testing times, and the temporary financial impact of Covid-19, should not deter us from progress but galvanise us to strive for true change in the critical areas of climate change, equality and the digital transformation of construction.”