ISG鈥檚 specialist fit-out business has been trading well, even surpassing management鈥檚 own expectations, but four remaining live construction projects that were taken on during 2012 and 2013 have caused the company problems.
鈥淭hese contracts are being progressively completed and closed out,鈥� ISG said in a trading statement today.
ISG made a loss of 拢21m in the first half of its financial year. It has closed its London Exclusive Residential and Tonbridge businesses of UK Construction and has been completing the remaining live contracts and continuing to pursue all contractual entitlements.聽
To accelerate final closure of these areas and collection of final accounts ISG is making a further provision of 拢5.5m for London Exclusive Residential and 拢5m for Tonbridge. The board explained: 鈥淭his covers unexpected cost overruns and delays on the remaining four live projects, unanticipated sub-contractor insolvencies and a mixed outcome of final account settlements and adjudication decisions, all of which have recently arisen.鈥�
It added: 鈥淲e believe the poor performance and painful restructuring of the UK Construction division is now behind us.鈥�
Looking ahead, the order book stands 6% higher at 拢1,106m (May 2014: 拢1,045m) of which 拢875m (May 2014: 拢820m) relates to the financial year ending June 2016.聽 Of the order book total, 拢376m (May 2014: 拢219m) relates to overseas activity.
Got a story? Email news@theconstructionindex.co.uk
