Lovell's œ7m loss

YJ Lovell chief executive David Heppell has had a torrid time during his first six months in office: "It has been a turnround situation," he said bluntly as Lovell last week announced an interim loss before tax of œ7.7 million last week.

Reshaping the group in the six months to March resulted in a œ4 million redundancy bill for closing the private housing division while an exceptional loss of œ4.2 million had to be taken in Partnership Homes. The construction division made a œ760,000 loss when interest on cash balances was stripped out.

Heppell was brought in from the company's north American wing at a time when it was thought the Lovell group may not survive. The new chief executive believes that the rejuvenated firm faces a sound future.

"We have reversed the cash drain," Heppell said last week. "We have renegotiated our facilities, extending them to 1999, and are now heading for better times. This was not a restructuring: we went back to our banking group and agreed a rescheduling of debt." Asked if Lovell was at risk of collapse, Heppell said: "We need our bank's support to continue and we have that."

Lovell's last full annual results (to September 1995) showed a loss of œ30 million, largely as a result of assets in America and the UK having been overvalued in previous years.

An earlier decision to pull out of private housebuilding is almost finished, Lovell has a few properties and sites still to sell. "I have no regrets at pulling out," said Heppell. "We didn't have a competitive position."

Alun Rees, the division's former md, has now left the company, although his terms have not yet been resolved.

The construction division's traditionally tendered workload is down from 80% of total turnover to 65%. Heppell aims to cut this to 50%.

"Negotiated work offers us better margins," he explained. Lovell has partnering arrangements in place with Railtrack, London Underground and Zenica.

Lovell has made progress with PFI in the health sector where it is seeking projects of around œ20 million. Appointed partner for the PFI hospital project at Reading, Heppell hopes to be on site by autumn, with income flowing in throughout the construction period.