Construction and engineering group Birse today said full year profits had halved after delays hit the start of contracts.
Birse, which operates in construction, plant hire and services, said pre-tax profits before one-off items in the year to April 30 had fallen to £3.3m from £6.6m a year ago.
The Doncaster-based firm said a switch by customers to a new type of contract, in which contractors like Birse carry out project design and planning as well as construction, had reduced production volumes and demand for heavy plant hire.
Operating profits in its construction division, which does roads, railways and other infrastructure work, had subsequently fallen to £2.6m from £4.4m previously.
However, Birse said it would recover the lost production in future periods.
It added that its record £507m order book and the quality of its new contracts left it well placed to benefit.
Chairman Peter Watson said: “With record order and enquiry levels in our core operations, combined with the quality of contract awards secured in the year, we continue to add impetus to the group’s underlying forward momentum.”
In May, Birse unveiled a management shake-up involving the departure of finance boss and company secretary Heather Craven and the linking of the latter role to the legal director’s position.
Birse said its accounting director of three years, Gerry Roche, would replace Ms Craven, who became finance director in 2001.
The company is hoping the shake-up will help it to get to grips with issues including an ongoing legal dispute with Citibank, which it said in December had cost it £1.3m.
As a result of the one-off charge, it reported a fall in interim pre-tax profits to £917,000 against £1.8m the year before.
Today, Birse said the restructuring of its Birse Build division, which handles school and education construction work, was proceeding broadly according to plan, although uncertainties remained.
The division, which has been pulling out of market sectors where it was not considered to be achieving adequate returns, reduced pre-exceptional operating losses to £7m from £8.7m a year ago.
Birse said the Citibank litigation was continuing and had cost it £2.9m against £4.6m last time.
References: EGi News 14/07/05
