Birse Build losses deepen

As expected, Birse unveiled more losses in its Birse Build business as it revealed its results for the year to 30 April. The division losses deepened from £6.4m last year to £8.7m on turnover down nearly 50% to £109.5m.

Birse Build has pulled out of the south and the Midlands, having closed its Tunbridge Wells office in February and the Northampton base earlier this month. By the end of the 2004/2005 financial year, monthly turnover will be about £3m a month, but due to legacy contracts Birse Build will incur further losses.

The reduction in the size of this business impacted on Birse's plant hire and site accommodation arms.

However, strong performances from Birse's other businesses, Birse Civils, Birse Rail, Birse Metro and Process Enginering helped ensure the group turned an improved pre-tax profit of £2m (£1.2m in 2003). The civil engineering businesses delivered a slightly lower turnover of £241.3m, but a higher turnover of £12.6m, while the process arm produced a turnover of £60.6m turnover and a profit of £493,00.

The group incurred a £4.6m exceptional cost relating to the adjudication with Citibank over its new data centre facility at Riverdale, Lewisham. The adjudicator determined that Birse Construction should pay Citibank £2.1m. The cost of defending the action has raised the total bill to £4.6m. Birse has challenge the decision, but its case will not be heard before the 2005/2006 financial year.

Birse's order book stood at £467m at the end of May, up from £382m in the previous year.