Diversified concrete, demolition and piling contractor Morrisroe Group has run up losses for a second consecutive year.
The firm managed to contain losses to £1.3m in the year to October 2023, improved from £11m in the prior year.
Losses for the prior 2022 year were restated from a previously reported £6.9m after an ‘unforeseen matter’ on a concrete frame scheme which gave rise to an increase in cost not previously forecast.
Following a review of all other legacy projects further adjustments were made on two other schemes where cost forecasts were found to be inaccurate giving rise to additional £4.4m of costs in the 2022 year.
Turnover at the Hertfordshire-based group edged up to £219m from £204m previously, but cash at bank fell £10m to £17m over the year.
Chief executive Brian Morrisroe said the main structures business had continued to be impacted by legacy fixed-price contracts.
But he said the piling business had seen significantly improved trading despite prevailing market conditions, and the group’s traditionally strong carpentry and joinery performers Houston Cox and Piper Joinery continued to report successful trading years.
He added that the demolition business had also returned to profit despite a drop in sales.
“Although it is disappointing to report a further trading loss as a group, it is a substantially improved position
as compared with the previous year as we emerge from a somewhat exceptional period in our trading history,” he said.
“We expect to continue on our positive trajectory to normal profitability in future years, with new contracts being secured with more reasonable risk-sharing terms, and now that supply is less of an issue, many of our material suppliers have begun to offer fixed price arrangements.”
In the first six months of this year, reinforcement and plywood prices stabilised while concrete rose by 7%.
Morrisroe added: “We expect a turnaround to profitability in the second half of this financial year with the substantial completion of the last remaining legacy project by the summer, resulting in a break-even year in this financial year, and with a return to normal industry margins of 3%-5% in 2025.
Turnover for this year is presently forecast to fall 19% to £175m due to a more selective approach to tendering to reduce risk exposure in some traditional markets.
He added that Morrisroe was now looking at a strong pipeline of work, including the basement and superstructure works for McAlpine’s £500m 2 Finsbury dual tower project in Broadgate.
