Murphy said that the financial loss was a result of “challenging construction market conditions of 2018 and individual project issues”. It added: “These projects have now been worked through and are adequately provisioned.”
For the year ended 31st December 2018, J Murphy & Sons grew its revenue by 4.4% to £781.3m, driven by strong performances in transport and power in the UK and by overseas operations in Ireland and Canada.
The pre-tax loss compares to a 2017 profit before tax of £12.4m.
The company said that while 2018 was ‘notably more challenging than recent years’, 2019 had started strongly with significant contract and framework wins across the power, rail and water sectors.
The current 2019 order book stands at £1.5bn (as at July 2019) giving full revenue visibility over the remainder of 2019, with both 2020 and 2021 also underpinned by 73% and 40% revenue visibility respectively. And earlier this month, Murphy secured a £60m financing package from Lloyds Bank Commercial Banking.
Chief executive John Murphy said: “In my first full year as CEO and against a challenging economic backdrop, I am pleased with the progress we made in 2018 on delivering a platform for sustainable growth. Despite broader market uncertainty and well-publicised headwinds facing the wider construction and engineering sector, we were able to grow our business and maintain our strong balance sheet. While our margin performance was disappointing, we increased our cash reserve and invested in the long-term development of our company.
“This investment has put in place new systems and processes that will help us to deliver sustainable growth and cement our position as a specialist engineering and construction company that delivers safely and reliably for its clients.
“Our business continues to benefit from a strong, asset-backed model supported by direct delivery, while our focus on five sectors and three geographies means that we are not overly reliant on any one sector or market.
“We have started the current financial year well, and our robust order book means that we have good revenue visibility underpinning our expectations for 2020 and 2021.
“We remain on-track to deliver against our long-term growth plan thanks to our measured and prudent approach to doing business, working with selected clients on the right projects in order to deliver long-term sustainable growth across the company, and I am confident that J Murphy & Sons Limited has a solid foundation on which to build a successful future.”