McLaughlin & Harvey makes £5.4m loss due to problem legacy contracts
The Northern Ireland construction group, which has worked on infrastructure and retail projects in Scotland, formed a group company, McLaughlin & Harvey Holdings, in October last year - which its directors said had effectively suffered a loss of £5.4m in 2015.
The results also recognise further predicted losses on those contracts that are due to be completed by the end of this year.
McLaughlin & Harvey said the loss was “attributable to a small number of construction contracts procured during the depths of the economic downturn”.
“The losses posted on these ‘legacy’ contracts include any predicted losses to completion in 2016,” it added. “All legacy contracts will be completed by the end of 2016.”
Directors said the they were confident the business could carry the loss with McLaughlin and Harvey Holdings showing a profit of £1.3m on turnover of £81m in its first two months of operation.
Speaking to the Belfast Telegraph, managing director Philip Cheevers, said: “We have regrets, and if we had to do it all again, we probably would do things differently, but the decisions we made were the right decisions at that moment in time.”
But the business said it had a strong and profitable order book, a strong balance sheet, strong cash position, and no bank borrowings. Employment across the group stands at 768 and it has net assets of almost £40m.
A strategic report filed with McLaughlin & Harvey Ltd’s results added: “While market conditions continue to be highly competitive, the ongoing investment to further develop the business throughout the UK and Ireland, allied with the retention and growth of our skills base, will ensure strong growth for the group in the medium-term.”