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Wembley legal row dents Cleveland Bridge accounts

Cleveland Bridge reported a £2.1 million pre-tax profit in 2008, but the firm is still saddled with debt following its bitter Wembley Stadium legal row with Multiplex.

Cleveland Bridge’s latest set of accounts show revenue reached £46.4 million up from £26 million in 2007.

The firm’s profit followed a £17.7 million loss in 2007 after the company wrote down the value of its Wembley contract by £11 million and took a hit of £7.3 million in legal costs.

The accounts show an overall net debt of £28.8 million as at the end of 2008.

As a result auditors Goodman Jones said in the accounts that Cleveland Bridge is dependent on continuing financial support from parent company Al-Rushaid Investment Company in Saudi Arabia.

The statement said: “The ultimate parent company has agreed to endeavour to continue to provide sufficient financial support to the company for a period of at least 12 months.

“As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that adequate financial support will continue to be available.

“Although as at the date of approval of these financial statements they have no reason to believe that it will not be so.”

Goodman Jones said Cleveland Bridge was in the final process of litigation with an appeal in place due to the valuation of the work on the Wembley contract.

The Wembley dispute centred on Cleveland Bridge UK’s £60 million subcontract for steelwork, including the stadium’s arch.

The company was found to be in breach of contract for walking off the project in 2004 following a dispute over payment.

Construction News revealed last year how the photocopying bill alone for the Wembley trial was £1 million.

Cleveland Bridge’s number of employees rose from 359 in 2007 to 371 last year increasing the wage bill to £15.1 million from £13.2 million the previous year.