Construction firm launches investigation after predicting £15m loss
Listed Huthwaite construction firm nmcn has revealed that it is set to make huge losses in its current financial year and that it is launching an investigation into all of its major contracts.
In a trading update this morning (October 15), nmcn said it will lose between £13.5m and £15m this year. The firm said an external investigation has started to verify the extent of prior year adjustments included within the loss.
The news comes two weeks after chief executive John Homer left the company with immediate effect.
Last year, nmcn made a profit of £7.4m.
nmcn has also undertaken a review of its financial structure following a change in payment terms on new Framework Agreements. The firm has appointed Arrowpoint to advise on a medium-term debt package to sit alongside its existing overdraft facility. It is also refinancing one of its property developments which will release £4m and has also started the sale process for some of its completed developments.
Ian Elliott, acting chairman, said: “Following the announcement of the Board changes and the subsequent internal review undertaken, a number of issues have come to light which are concerning and are being addressed. Decisive action is being taken by the Board to limit the impact on the business and to ensure that the good relationships which the Group has enjoyed with its customers for many years are maintained.
“I am pleased to report that activity levels and sales inquiries are encouraging and that we are close to appointing a new CFO.
“The combination of the coronavirus impact and the company’s internal issues is challenging, but the Board remains confident of the market opportunity and the Group’s ability to successfully address it.”