McLaughlin & Harvey 'will survive its £5.4m loss'
The two main firms within construction giant McLaughlin & Harvey suffered a combined £5m loss in 2015, the business has said.
McLaughlin & Harvey, which is based in Mallusk and has worked on projects from the new Ulster University campus in Belfast to infrastructure and retail sites in Scotland, explained that the loss was due to problematic legacy contracts.
The firm formed a group company, McLaughlin & Harvey Holdings, in October last year - which its directors said had effectively suffered a loss of £5.4m in 2015.
But they said the business could carry the loss, and had net assets of £38.3m between its two main firms - McLaughlin & Harvey Ltd, and a company for their work in Scotland, Trench Holdings Ltd.
In Scotland, the company's work had included a £7m music department at Fettes College, the private school attended by Tony Blair. It is also currently building a £67m critical care unit and helipad at King's College Hospital in London.
McLaughlin & Harvey Ltd reported a loss after tax of £9.7m in 2015, while Trench reported a profit after tax of £4.3m - resulting in what would have been a loss of £5.4m for the holding company.
There were combined sales of £474.7m - made up of £273.8m at the Belfast firm, up from £195.8m, and £200.9m at the Glasgow firm, up from £183.9m.
The business said the loss was "attributable to a small number of construction contracts procured during the depths of the economic downturn". "The losses posted on these 'legacy' contracts include any predicted losses to completion in 2016," it added. "All legacy contracts will be completed by the end of 2016."
Speaking to the Belfast Telegraph, managing director Philip Cheevers said: "We have regrets, and if we had to do it all again, we probably would do things differently, but the decisions we made were the right decisions at that moment in time."
But the business said it had a strong and profitable order book, a strong balance sheet, strong cash position, and no bank borrowings. It has 768 employees, including 436 in the Belfast firm and 332 in Glasgow.
The business said projected turnover for the group in 2016 was £430m, including £247m from the Belfast firm.
A strategic report filed with McLaughlin & Harvey Ltd's results added: "While market conditions continue to be highly competitive, the ongoing investment to further develop the business throughout the UK and Ireland, allied with the retention and growth of our skills base, will ensure strong growth for the group in the medium-term."
As well as growing its construction and civil engineering work, it is also increasing its facilities management (FM) services. At present, it carries out FM for retailers including Marks & Spencer and Waitrose in Great Britain. And the business said it also hopes to extend its work in airport infrastructure after carrying out work to build a runway at Orkney in the Shetland Islands. It also hopes to extend its infrastructure work to include work on railways in England.