McAlpine slips after profits disappointment
Shares in British construction group Alfred McAlpine tumbled 7% today after half-year results were affected by less work from utilities firms.
McAlpine said underlying profits were flat at £14.6m (€22m), but insisted its problems were short-term and that it remained on course for growth in 2004.
Its difficulties stem from a decision by utilities firms to keep a tight rein on budgets during a five-year price review being carried out by regulator Ofwat.
London-based McAlpine maintains water pipes, sewers, roads and power lines, as well as managing PFI projects to upgrade schools and hospitals.
Signs of recovery had been seen since June and the group said it was well-placed for growth as the reviews would eventually spark higher spending in the utilities sector.
Chief executive Ian Grice said: “Short-term difficulties in the utilities market are constraining our current growth profitability.”
But he added: “We are on course to deliver another year of growth. Beyond 2004, the prospects for returning to our target of double-digit growth remain good.”
The company also revealed it had racked up £1m (€1.5m) in costs during a legal dispute with construction rival Sir Robert McAlpine over corporate “name-dropping”.
A High Court judge ruled in March that Alfred McAlpine should be blocked from rebranding its empire as “McAlpine” to avoid confusion with its rival.
Legal costs and writedowns on the value of assets contributed to bottom-line profits falling to £9.5m (€14.3m), compared with £14.8m (€22.3m) a year ago.
McAlpine was reorganised in 2003 into three “business streams” to look after capital projects, infrastructure-management contracts and a string of business-support functions.
This marked the end of its transition from a traditional housebuilder that began in 2001. McAlpine currently employs 8,000 staff in the UK.
Turnover grew 3.6% to £431m (€649.5m) in the six months to June 30 and the group lifted its order book by 8% to stand at £3.2bn (€4.8bn).
Contract wins include redeveloping Stoke Mandeville hospital in Buckinghamshire and a new highways-management contract with Redcar and Cleveland Borough Council.
Shares slipped 18.75p to 265p today.
