Mowlem takes £27m hit

The pre-Christmas mood of biting the bullet and coming clean over hidden muddles seems to be catching on…. last week Alfred McAlpine announced a £27m  hole in this year’s profits and this morning Mowlem has done exactly the same.

Mowlem’s £27m surprise is made up of two elements – a £12m exceptional item to cover muddles in Australia and a £15m write-down.

The manoeuvre is an attempt to give Simon Vivian a level playing field when he takes over as chief executive from Sir John Gains at the end of the current financial year.

Mowlem’s trading statement said: “The board expects profit for the full year to be at the lower end of expectations before the exceptional item of £12m in respect of Australia and the write-down of £15m."

Last year, Mowlem’s £2bn turnover produced a pre-tax profit of £45m. The figure included the sale of two PFI equity stakes for £21m: the initial spend on them ran to £5m. Mowlem’s construction division achieved a margin of 1.8%.