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Clugston turnover to suffer from PFI delays

FINANCE Rapid growth will end but group prot for 2006 is up by a half to £1.3 million

CONSTRUCTION turnover will fall back this year at Scunthorpe-based Clugston after nearly doubling during the previous 12 months.

Clugston Construction's chief executive John Burnett said: 'There was a significant increase in turnover as two Private Finance Initiative deals got delayed and fell into this year's turnover.

'In 2007, it will even out and we'll do about £115 million.

'We are not chasing turnover; we are trying to be a sector specialist.'

Clugston completed one of these PFI deals - a £25 million hospital in Daventry - in August and will finish off the other, a health scheme of similar value in Newcastle, by the end of this year. Both are for United Medical Enterprises.

Clugston has built four PFI health schemes but retained an equity stake in only one, a medical centre in Nottingham.

A stake in a community hospital in Sedgefield has been sold by Clugston's PFI team, which operates out of Leeds but does hard and soft facilities management on all four schemes.

Clugston resolved a handful of long-running disputes, including one at South Leeds Stadium that stretched back to the 1990s and involved booking a small loss.

Chairman Roy Butcher said: 'The finalisation of these disputes was achieved at a small net loss to carrying value but the potential costs of ongoing legal support made any other cou rse of act ion unviable.'

Clugston Construction works regularly for supermarket chain Morrison along with PFI health and warehouse work.

Civils, including wasteto-energy projects, provides around 40 per cent of the turnover but specialist utility business Ferro Monk is still waiting for spending from the AMP4 water programme to come on stream, with turnover flat at £4 million.