Montpellier warning to City of 'significant operating loss'

Montpellier has warned that when its financial results for the current year - the period ends on 30 September 2004 - are published, they will show a "significant operating loss".
In a statement to the Stock Exchange, Montpellier said: "Following the recent management changes, the reconstituted board has thoroughly reviewed its businesses. Despite positive underlying current trading in most of its businesses, the review has revealed material problems not previously apparent relating to UK construction contracts entered into in prior years.
"As a result, the board expects to report a significant operating loss for the financial year ending 30 September 2004. In the group's interim results, which will be announced on 3 June, the board will set out in more detail the findings of its review, together with its business recovery plan."
Montpellier's new line-up at the top includes Roy Harrison, executive chairman, and Sandy McArthur, finance controller. Paul Sellars parted company with Montpellier a month ago. He took over as group managing director in October 2003 when Roger Feast staged a management buy-out of four of the smaller construction businesses within the group that were not seen as core to its future development.
McArthur, who has been with Montpellier for four years, is group financial controller. "We've had no formal finance director for some time," a spokesman said, "as the group has had sufficient support from the finance team. When we did look for a finance director, we didn't find a suitable candidate."
Asked why Sellars had left, he said it was a "mutual decision" following a meeting between Sellars and the new board.
Last year, Montpellier's turnover of £430m generated a pre-tax profit of £4.7m. The current problems are said to relate to old contracts. "Current trading is fine," said the spokesman.