North Midland Construction hit by payment delays

North Midland Construction (NMC) reports this morning that "the maintenance of cash flow is proving difficult". The money is not coming in because payments are being delayed.

The culprits are private clients: some are holding onto NMC’s money for 15 days longer than they previously did.

By contrast, public sector clients are the good guys. Mike Garratt, NMC’s finance director, said: "The major public sector clients are sticking to the terms of the contract and are being quite honourable."

The slow-payment hiccup has triggered Robert Moyle, chairman, to pass the verdict that despite these setbacks he is confident that trading within NMC’s existing banking facilities can be maintained.

The latest interim management statement from NMC covers the period 1 July to 13 November.

“The current economic climate continues to be challenging,” says Moyle. “Revenue and profit will fall short of 2007, but will be in line with the reduced revised forecasts.”

North Midland Building

Profits will fall “considerably short” of last year, due to the cancellation of contracts and the deferment of the second phase of an existing project.

Nomenca

Performing well and a result in line with expectations is still forecast.  The recently opened Scottish operation is thriving. The main business has recently transferred to more modern and larger premises in Bristol to accommodate anticipated expansion in the region.

Civil Engineering

Turnover will fall short of 2007’s figure but, thanks to a large proportion of revenue deriving from framework contracts and recent contract awards, the downturn will not be so severe.

The joint venture with Biwater for Severn Trent Water at Minworth continues to perform well.

Negotiations continue with regard to the contractual problems on three claims mentioned in previous reports. There is some progress on this score though the eventual out-turns are still not settled.

Highways

Turnover will be higher than in 2007 but profits will dip.

Utilities

The problematic contract in East Anglia is now complete and volumes on the BT contract in the East Midlands for Telent are now reduced.

Apart from these issues, other contracts in the division are performing well and an improved result over 2007 is predicted.