INTEREST payments on its heavy borrowings kept Y J Lovell in the red last year, although the losses were much reduced.
The firm believes its recovery plan is on schedule. Heavy cuts in overheads helped it produce
an operating profit of £68,000, although this was wiped out by interest charges of £1.6 million.
The firm has shed around 40 staff from its headquarters in Gerrards Cross, reducing the headcount to around 20.
'These results show we are on track,' said chief executive David Heppell.
Lovell reported a pre-tax loss of £1.54 million (1996: £11.8 million loss) on a turnover down some 11 per cent at £227 million. No dividend was paid.
Mr Heppell said the company was in the second year of a three-year turnaround and the results met expectations.
The group's borrowings, a legacy of its overexpansion in housing in the late 1980s, remained high at £27.8 million, compared with £31.5 million last time. But the firm is due to raise over £5 million from residential land sales and up to £12 million through the redemption of second mortgages issued by its housing business.
Underlying debt stood at around £20 million.
Lovell's partnership housing operations saw units slip slightly to just below 2,000 units.
While the firm is seeing no dramatic expansion under the new government, local authority and housing associations were making more use of private finance. Lovell is working on more inner city redevelopment and refurbishment schemes.
Meanwhile, the company's construction division was faring well on smaller contracts up to £5 million, although the market for larger contracts in the £15 million to £20 million range was more competitive.
Chairman Sir David Hardy said Lovell's order book underpinned the current year's trading and he was confident the group's long period of losses was behind it.