Sir Robert McAlpine Holdings has reported a pre-tax loss of £37.7m in the year to 31 October 2013, down from a profit of £19.2m in 2012.
It said the loss was as a result of having to provide financial support to its Bermudan joint venture company BCM McAlpine Ltd, which had incurred “extensive additional costs” while building the KEMH PPP hospital redevelopment.
Although BCM has “significant claims outstanding”, the contractor said no allowance has been made for any recovery.
The project is due to complete in June and the firm said no other significant projects were being undertaken by BCM.
Sir Robert McAlpine Holdings is the holding company and umbrella group to subsidiaries including Sir Robert McAlpine Ltd, Bankside Electrical Contractors and McAlpine Properties Ltd.
The contractor’s group parent company, Newarthill Ltd, reported turnover of almost £898m, up from £769m, with an overall group loss of £3.5m compared with a profit of £49.7m the year before.
Excluding the KEMH redevelopment, it recorded overall group profits of £37.4m, down from £53.8m in 2012.
UK revenue was £831.7m, up from £694.7m in 2012, while contracting accounted for £810m of its total group revenue.
Net assets were valued at just over £200m, up from £190m in 2012.
The firm’s UK arm, Sir Robert McAlpine Ltd, saw its pre-tax profits drop by more than £16m in the year to 31 October 2013.
The contractor boosted turnover in the UK to £780m from £664m in the year, but pre-tax profits slumped to £4.4m in 2013 from almost £21m in 2012.
Its total assets less its current liabilities were valued at £164m, slightly down on the £168m recorded in 2012, while net cashflow from operating activities increased to £14m from £9.2m.
Its overall net cash was £67m, up from £59.2m in 2012.
Highlights during the year included reaching financial close on the £180m City of Glasgow PPP where it invested £21.5m through equity and loan stock.
On disposals, the contractor sold its Dudley Hospital PFI and Dundee Schools PPP, which resulted in cash proceeds of £25m and a profit on sale of £37m.
Contracts it started on in the financial year included the £650m US Embassy in London and the £64m North-east priority schools batch.
The average number of people employed at its UK contracting arm was 1,954, up from 1,775 in 2012.
Director Ian McAlpine said: “The UK construction market remains highly competitive and price-driven and the company remains cautious, pursuing work only where our experience and capability match the intrinsic risks of the project and suitable margins can be obtained.
“Looking forward, our order book continues to increase and we are expecting a resultant improvement in both turnover and profitability over the next two years, stemming from our sustained involvement in the commercial high-end residential and education sectors and also increasingly from the retail sector and a greater workload from civil engineering projects.”
Mr McAlpine said the firm’s “strong balance sheet, large cash reserves and no borrowing” meant it was in an excellent position to exploit opportunities as the market improves.