Social housing contracts tendered at ‘unachievable’ prices and a ‘significant’ contract dispute caused profits at Osborne to drop by more than 70 per cent last year, the firm said.
Annual results show that turnover at Osborne fell slightly to £281 million in the year to 31 March 2012, from £286m in 2011, with pre-tax profits down from £3.5m to £1m. Operating profit dropped from £3.3m to £200,000.
The company said: “The core of the business has traded satisfactorily and the decrease in profit year on year was primarily due to a number of affordable housing contracts that had been tendered at unachievable prices and a significant dispute over contract interpretation on a specific property services contract.
“The full anticipated losses on these projects have been provided for in the profit and loss account.”
The firm’s secured order book for the next 12 months was £149m, down 18 per cent on 2011’s £182m figure. The group has a further £56m of work in the year which is currently in second stage or single source negotiation.
The company - which sits at 48 in the CN100 - also saw average number of employees fall by 1 per cent from 950 to to 937 “due largely to a rationalisation of the business in the current economic climate and the drive for greater efficiency”.
The firm added that it ‘substantially operates in the public sector’ and that “there remain good opportunities in all the group’s key markets”.
An interim dividend of 4.7p (2011 – 7p) per ordinary share amounting to £49,000 (2011 – £73,150) and a special dividend of 19.1p per ordinary share amounting to £200,000 were paid during the year (2011 – nil).