Cleveland Bridge UK confident over Wembley resolution despite setting aside £10.7m

Cleveland Bridge’s prudent accounting principles have resulted in it setting aside £10.7m pending the outcome of the High Court’s findings concerning its dispute with Multiplex over the Wembley station project.

The group’s latest annual financial results (12 months to 31 December 2005) show a pre-tax loss of £11.9m.

There was a further burden of an operating loss of £700,000 from ongoing activities.

The ongoing uncertainty triggered by the Multiplex battle has prompted a severe drop in turnover, which more than halved to £26m (previous year’s figure: £61m).

The group seems to have turned the corner, stating that it has been successful in the last six months in delivering projects on programme and on budget.

“The Darlington factory is close to capacity with a range of profitable projects,” says the statement, adding that the group has “an extensive new business pipeline.”

To keep Cleveland Bridge UK steaming ahead during 2005, the financial burden fell on its equity shareholders who saw the deficit in their funds climb from £2m in 2004 to a figure of over £10m.

However, owner Al Rushaid Investment Corporation, based in Saudi Arabia, is standing firm in its backing for Cleveland Bridge and has no intention of walking away from the dispute with Multiplex.

Cleveland Bridge UK remains optimistic of emerging from the High Court without costs – boss John Dale, president of Cleveland Bridge Dorman Long Engineering having been angered at earlier reports in the construction press of having to face paying out £20m.

The group says that it remains optimistic that its claims will be met in full, despite the need for a prudent accountancy policy in its latest financial figures.