For the year to 31st October 2015 Sir Robert McAlpine made a loss on ordinary activities before taxation of £52.2m, compared with a pre-tax loss of £54.8m in 2014.
Group turnover, including share of joint ventures, was £782.1m (2014: £1,020.2m).
In his report, chief executive Tony Aikenhead said: “During 2014 the group identified a small number of construction contracts which had been tendered and started during the recession where significant costs were being incurred and considerable losses were expected. Although a prudent view of the final outcome of those contracts was made last year, the financial position has deteriorated further as the completion dates have extended by more than expected and costs have also consequently increased. Of these contracts, the worst performing have now reached practical completion and most are very close to completion.”
Mr Aikenhead, who took over as chief executive after the financial year-end in November 2015, continued: “The 2015 results have been disappointing and continue to be highly influenced by a small number of legacy contracts, all of which have now reached, or are close to, completion. During late 2014 the company implemented revised risk management and tendering procedures, which we have diligently applied and enhanced. We are pleased to note that these procedures have led to much better performance and margin from contracts that we entered into filling the introduction of these new governance procedures. We are confident, therefore, that the construction business will return to profit in 2016.”
He said that the company would return to profit this year. “We are very positive about our prospects in 2016. We are expecting turnover to increase as we implement our new strategy with continued engagement in the commercial, retail, education and residential sectors and as our new civil engineering business begins its sustained expansion.”
Civil engineering is expected to account for 20% of turnover by the end of 2019.
Sir Robert McAlpine had cash balances of £156.5m at financial year-end (2014: £141.2m) but total borrowings had increased to £184.0m (2014: £117.2m), although all of this represents non-recourse debt in wholly-owned PPP special purpose vehicles.
Parent company Newarthill reported a pre-tax loss of £35.7m for the year, compared with a loss of £67.8m in 2014.