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Ardmore results show £12m loss as turnover falls by 9.4%

Ardmore has posted a £12m loss in its latest results after two exceptional items hit the firm’s bottom line.

The loss for the year to 30 September is the firm’s second in successive years, after it lost £5.7m in 2013/14.

Turnover at the firm, which picked up the £170m Ram Brewery job from Kier earlier this month, fell by 9.7 per cent to £218.5m, down from £241.2m a year earlier.

Ardmore said the losses were due to weaker margins as well as two major exceptional items.

The sale of a light industrial unit in the Midlands, which the company deemed “to no longer meet the investment criteria set by the board”, incurred a one-off loss of £1.1m.

The firm also settled a tax claim with HMRC in May 2015 relating to option awards made in 2005. This incurred losses of £5.6m after “protracted negotiations”, according to the company.

As a result, Ardmore will not pay a dividend to shareholders, having paid just over £3 per share last year.

Gross margins slipped to 3.6 per cent in its latest results, down from 4.6 per cent for the previous year, which the firm chalked up to legacy contracts and cost escalation.

The company said a number of contracts won during 2009 and 2012 were mostly completed during 2014 and 2015, but that some legacy deals were still yet to be worked through.

Ardmore’s order book showed that 100 per cent of its target revenue for 2016 had been secured, as well as 70 per cent of 2017’s.

Earlier this week, Hong Kong developer Hutchison Whampoa chose the company for the next phase of its £170m regeneration of Chelsea Waterfront power station.

Looking ahead, the firm said that “controlling overheads and establishing a robust and reliable supply chain” would be crucial challenges, but added that it was “increasingly optimistic” after negotiating new contracts at “more sustainable margins”.

 

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