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Mon August 02 2021

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McLaren takes £19m hit from cancelled ABB contract

15 Jun Latest financial results from McLaren Construction Limited show losses due to the cost of a cancelled contract.

For the year to 31st July 2020 McLaren Construction Limited made an operating loss of £15.5m (2019: £3.5m profit) on turnover down 19% at £525.8m (2019: £650.9m).

The company made a loss before tax of £10.1m (2019: pre-tax profit of £2.6m).

What specifically hurt McLaren’s numbers for the year was a £19.4m exceptional loss attributed to the cancellation of an infrastructure contract within its Midlands and North subsidiary.

While the specifics of the case are not mentioned, it is known that McLaren was embroiled in a legal dispute with ABB over the termination of a delayed contract in May 2019 to build a converter station in Blyth for a subsea transmission cable. (ABB AB HVDC -v- McLaren Construction (Midlands and North) Ltd [2019] ).

The matter appears to be closed now. A footnote to the account states: “The contract loss has been fully provided for with the parties having reached a settlement. The directris are confident no additional costs will be incurred."

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