Montpellier crashes to £21m loss

Montpellier has crashed into the red, announcing a pre-tax loss of almost £21m in the latest interim financial period.

Turnover in the six months to 31 March 2004 was unchanged at £210m, but performance was well down - Montpellier made a pre-tax profit of £3m in the equivalent period last year.

The two problem areas are YJL Construction and Allenbuild where additional provisions of £15m have been necessary to "reflect contract exposures".

Roy Harrison, who has recently taken over as executive chairman, said: "The newly reconstituted board has in the last two months undertaken a comprehensive business review. We have identified all major contract exposures. Trading in the majority of our operating subsidiaries remains profitable."

When the full-year's figures are announced, Montpellier will still be in the red, but Harrison said he was confident that the group would return to profit for the following financial year.

Turning to the Lovell Pension Scheme, which is run to the SSAP24 accounting standard and shows a deficit of £34m, a current initiative is in place to trim back that figure by £5.7m. "The deficit is a significant issue," Harrison said .