Sir Robert McAlpine to leave energy from waste sector following £23m loss

Paul Hamer

Sir Robert McAlpine has confirmed it will be pulling out of the energy from waste (EfW) sector after reporting a pre-tax loss of £23 million last year.

The firm said today it will “not be pursuing future opportunities” after running up the losses on the projects which have been booked as a £37m exceptional in accounts for the year ending October 2017.

McAlpine made underlying profits of £14m and the company boasts a pipeline of work that is stronger than it has been for more than 10 years.

However, due to work undertaken on three energy from waste projects, the company posted a loss after exceptional items of £23m.

Just like Costain and Interserve before it, who have also run into problems in the sector, McAlpine said that it will not be bidding for any more contracts in the future to build waste to energy plants.

Chief executive Paul Hamer said: “Over the course of 2017, Sir Robert McAlpine worked on three energy projects, all of which have incurred considerable losses.

“Two of these were ‘energy from waste’ projects which were completed during the year; the final accounts have been agreed with the client and all claims settled.

“The last projec is forecast to be completed by October 2018.”

Hamer added: “While the UK construction market remains highly competitive, the construction profits, before exceptional items, of the group have increased, albeit margins remain unsatisfactory.

“Looking forward, we forecast that construction management will represent as much as 50% of Sir Robert McAlpine’s workload in London.

“The proportion of turnover from frameworks has increased as Sir Robert McAlpine continues working with British Land at Broadgate in London commencing two new projects and, in the healthcare sector, through the P22 framework.”

Hamer said: “We are very positive about Sir Robert McAlpine’s prospects for 2018 and beyond with the level of secured turnover in the pipeline the highest it has been in recent years.

“However, we will remain cautious and continue to move the business away from fixed price contract risk to a more collaborative approach with our clients.”

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