NG Bailey made a £10m loss in 2013 following a restructure costing more than £5m and a £6.1m hit on two contracts.
The firm had restructuring costs of more than £5m, most of which were redundancy expenses, and £6.1m of exceptional costs on two contracts in the year to 1 March 2013.
NG Bailey chief executive David Hurcomb flagged the exceptional costs on problem contracts in an interview with Construction News in August, when he described the deals as ones the firm had “probably taken at a competitive price with bid assumptions that haven’t come off”.
Without the exceptional costs, the firm would have posted a £1.1m pre-tax profit.
The firm has said it will continue its plans to cut back on building construction work and increase its services in engineering construction work.
In its accounts filed at Companies House, the firm said: “The general economic environment has continued to be extremely tough in the 2012/13 financial year, with our largest market, the building construction sector, particularly badly affected with a year-on-year reduction of 13 per cent in market volume and increasingly tight margins.
“Against this market background, our strategy to reduce our exposure to the building construction sector and to grow our services and engineering construction businesses (up by 26 per cent year on year) is the right one and this is reflected in our financial performance in 2012/13.”
The company’s turnover dropped 8 per cent to £422m in 2013 compared with 2012.
This was due to a 12.3 per cent fall in construction – where the firm said it had strengthened its “bid/no bid process to avoid ‘buying’ risk” – and was partially offset by a 10 per cent rise in services and a doubling of engineering construction revenues.
NG Bailey reduced its overheads by £3.6m in the year when excluding exceptional costs, but overheads rose by £1.5m with these expenses taken into account.
The company’s cash increased by £1.2m in the year, while its average number of employees was 2,721, up from 2,690 employees last year.
Its recent contract wins have included a deal to provide permanent M&E services at the £400m redevelopment of London Bridge station, a £15m contract to provide mechanical, electrical and plumbing services for an office development at the new Aberdeen International Business Park and a £10m deal for M&E and IT services to a new in-patient unit in Blackpool.