Turnover and profit slips at Montpellier

Montpellier's construction division had a tough time in the year to 30 September 2003 as both turnover and pre-tax profit fell back.

Turnover slipped from £445m to £434m, while pre-tax profit fell back from £4.9m to £4.7m. The construction division delivered an operating profit of £3m, down from £5.8m in the previous year.

Chairman Cedric Scroggs blamed the decline on a number of problem contracts in the YJL Construction, Allenbuild Midlands and Allenbuild North East businesses. "The board has reviewed these contracts and consider that the problems stemmed from the initial acceptance of work and pricing process that lead to ongoing difficulties in contract performance," he said. "To prevent such problems in the future, management changes have been introduced in certain companies as considered necessary."

The board is moving its construction businesses away from large residential projects after provisions had to be made for the cost of settling two central London developments. Montpellier is also engaged in an arbitration claim for another central London residential scheme.

There was some good news, with Bullock, Walter Lilly, VHE and Britannia singled out for making good progress and expecting further growth in turnover and margins.