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McAlpine back in profit but suffers pensions hit

Sir Robert McAlpine has posted an operating profit in its latest accounts but suffered a pre-tax loss after writing down the value of its pension scheme.

According to accounts filed with Companies House, the contractor posted an operating profit of £1.3m for the year to 31 October 2016, after reporting a £44.4m operating loss in the previous 12 months.

Turnover rose 8.7 per cent to £869.6m.

However, the firm also revealed a £53.4m exceptional writedown of its pension scheme, after a valuation of the scheme in May last year revealed a £107.6m pension deficit.

This exceptional item led the company to post an overall pre-tax loss of £43.2m and a statutory post-tax loss for the year of £33.3m.

These are the first annual results since the firm announced the departure of chief executive Tony Aikenhead in July last year, just nine months after his appointment.

The group has previously said “a small number” of construction contracts won during the recession had led to “considerable losses”.

However, Sir Robert McAlpine has now reported that all of these problem contracts have reached practical completion and that no further costs will be incurred.

The firm is also targeting more work through frameworks as part of its strategy through to 2019, while civil engineering is intended to make up “a major part” of the contractor’s turnover by the same year.

Construction News reported last year that the contractor was targeting at least a fifth of its revenue through civil engineering by 2019.

Major contract wins for the firm in the year to 31 October 2016 included a place on the £4bn ProCure22 framework and a role as British Land’s construction partner on the remainder of its Broadgate Campus in London.

Sir Robert McAlpine is currently delivering a major package of works to convert Lynemouth power station to biomass.

Projects completed in the year included Hammerson’s Victoria Gate shopping centre in Leeds city centre and the first phase of the expansion of Pinewood Studios.

The firm reported that its Caribbean arm, which made up about £15m of its turnover, remained profitable.

The group recorded a cash balance of £224m, down slightly from £261m a year earlier, while borrowing fell to £183m, down from £188m.

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