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T Clarke says pricing and bidder numbers blighting M&E sector

Unrealistic pricing and high numbers of bidders are continuing to “blight the construction industry” particularly in the M&E sector, T Clarke said in a trading update this morning.

The building services firm stated: “We maintain strict criteria when assessing projects that we choose to bid for but characteristics such as a high numbers of bidders and unrealistic pricing levels continue to blight the construction industry.”

It said this was resulting in margin pressures and a lack of confidence in progressing new schemes “particularly across our core M&E contracting businesses”.

T Clarke will partner with Balfour Beatty on the Welsh Government’s Designed for Life: Building for Wales 3 national framework.

It announced the successful bid in an interim management statement this morning.

The building services firm also said it had secured 55 per cent of target revenues for 2013.

Its forward order book stands at £230 million (31 October) – an increase of 23 per cent compared with the same period last year, while cash balances at 31 October were £1.2m.

The firm added that “a few” contracts have suffered some initial programme delays which it expects to recover.

It pointed to its utilities and technologies division, now known as T Clarke Mission Critical, as instrumental in securing contract awards for four data centres this year.  

T Clarke saw pre-tax profits fall by 64 per cent to £0.5m in the first six months of 2012 on the back of tough markets and further restructuring costs, it reported in August.

Those results had followed a reported 11 per cent increase to its order book in the 12 months to May.

In March, T Clarke reported a 14 per cent profit fall for 2011 after the firm restructured in the South and Scotland.

The company’s projects have included the Olympics, Westfield shopping centre and the Shard, with 2011 wins including the Walkie Talkie and 100 Bishopsgate.

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