Headcrown Group, which includes contractors Gee, Cruden and JF Finnegan, made a pre tax loss of £9.9m in 2010/11
Property write-downs at subsidiary JF Finnegan and the collapse of another subsidiary, contractor Browns Construction which went into administration in September, made up much of the fall from the £2.8m pre-tax profit it made in 2009/10.
Headcrown’s turnover fell from £140.6m in 2009/10 to £134.2m a year later, according to group’s annual report for the year ending 30 September 2011 which was published by Companies House today
The report said Headcrown had suffered an exceptional loss of £6.6m as a result of the Browns administration plus a trading loss within the contractor of £690,000. However it said there would be no more losses as a result of the administration and added that the administrators are pursuing a number of claims against former clients of Browns.
JF Finnegan had also suffered a drop in turnover because of delays in starting contracts it had won. The contractor has been restructured with several redundancies. Some of its property assets were written down to reflect depressed values in the regions.
However the report said subsidiaries Cruden Group and Gee Group performed much better. Crudden saw profits and turnover rise across the year, although the second half of the year was tougher than the first, according to the report although figure for the subsidiaries were not given.
Headcrown expected to return to profit in 2011/12. It said it had made full provision on its balance sheet for the losses associated with eh administration of Browns, had the support of its banks. It will not redistribute profit in the medium term while reduces its debts. It said it would not seek work at uncompetitive rates even if this necessitated a short term reduction in its turnover.
The annual report said Gee Construction was facing a £2.9m claim for defects and poor workmanship but strongly refuted it and do not expect it to result in significant cost to the firm.