In the six months to 30th June 2015 North Midland Construction (NMC) made a pre-tax profit of 拢136,000 on revenue up 18% to 拢107.25m.
The results would have been stronger but for a loss of more than 拢800,000 in the Utilities division.
The pre-tax profit was significantly down on the 拢332,000 profit made in the first half of 2014, but after a full-year loss of 拢3m in 2014 and 拢6m in 2013, chairman and chief executive Robert Moyle said that it was "gratifying to report a return to profitability".
He said that "positive progress has been made in the resolution and settlement of the few remaining legacy contracts, but there is still potential risk in their final resolution".
In the first half of 2015 the utilities division increased its revenues by 20% to 拢13.24m but further losses on the BDUK contract for Carillion Telent resulted in an operating loss for the period of 拢830,000.聽 The division has now terminated its contracts for Carillion Telent in the Lincolnshire, Shropshire and Yorkshire areas and has retrenched solely to the core East Midlands area, which is profitable.
NMC鈥檚 civils division, now a stand-alone entity under the senior management of NMCNomenca, has continued to have problems with two legacy contracts, contributing to a loss of 拢240,000 on revenue of 拢3.44m, Robert Moyle said in his chairman's report.聽 One contract will be concluded on site in mid-September and the finalisation of contractual matters on the other is imminent.聽 The underlying business is trading profitably, he said, and the order book to be completed this financial year is 拢7.0m.聽 It is still 拢5m short of achieving its yearly forecast, but tender opportunities remain positive and there is time yet, he said.
The performance of the building division was described as 鈥渆ncouraging鈥�, with an operating profit of 拢140,000 on revenue of 拢5.9m.聽 The current workload to be constructed this year is 拢13.4m and a further 拢6m of contracts are expected to be awarded imminently.聽聽 Orders received for completion in 2016 already total 拢8.5m.
Revenues in the highways division more than doubled from 拢7.7m in the first half of 2014 to 拢18.8m this time. Last year鈥檚 拢10,000 operating loss became a profit of 拢170,000 this year.
Mr Moyle said that the highways division 鈥渉as experienced increased opportunities on the back of a proven track record, increased government expenditure and geographical expansion into the southwest鈥�.聽 Revenues for 2015 are set to exceed current budgets and advanced orders for 2016 are 拢17.2m.
NMCNomenca has started on the AMP6 programme for Severn Trent Water and revenues were steady at 拢42.0m.聽 Operating profit fell 23% to 拢720,000, but only because last year鈥檚 results included a significant contribution from the E5 consortium engaged on the AMP5 capital programme for Severn Trent Water that has now concluded.聽 NMCNomenca has recently been awarded a 拢64m contract for the Elan Valley Aqueduct by Severn Trent Water in a joint venture with Barhale. A multi-million pound project for the construction of a reservoir at Ambergate with Laing O'Rourke is progressing well, the chairman added.
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