œ65 million bill puts Tarmac into the red

A œ65 million charge for restructuring following Tar-mac's œ600 million asset swap with Wimpey in March, put the group well into the red in the first half of 1996.

However, Tarmac chief executive Neville Simms (pictured), announcing the group's interim results for the first six months of the year, said that the management of the change was going well - the integration having already produced annual cost savings of œ35 million. "That's double what we expected," said Simms.

Since the swap there have been 400 redundancies in Tarmac's heavy building materials division, while in construction a further 700 jobs have gone. More re-shaping will see Tarmac shed 300 extra construction posts before the year end.

Tarmac showed a loss before tax of œ58 million on turnover of œ1.2 billion. Simms described operating profits of œ35 million as "disappointing". Compari-sons with last year's figures are meaningless because of the swap.

Tarmac has lifted its negotiated workload in construction from 11 per cent to 30 per cent. In UK building the figure is 35 per cent, with one undisclosed region having managed to negotiate 60 per cent of all its workload.

Simms pointed to a modest recovery to construction margins. "I'll be disappointed if Tarmac did not get back to the historic figure of 3 per cent," he said.

The construction value of PFI schemes which Tarmac has won, or is preferred bidder, totalled œ330 million, yielding a further œ330 million of facilities management and routine maintenance contracts - plus a further œ130 million worth of major maintenance schemes.