A FAILED attempt at contracting knocked a £1.2M hole in consultant WSP's first half profits, results published this week show.
The firm took on the construction of three internet server centres for the British arm of US dot. com company Hosmark.
As prime contractor WSP was responsible for channelling retentions through to construction subcontractors on projects in Frankfurt, London and Stockholm.
But Hosmark fell victim to the collapse of the internet services sector and its UK arm went into administration, leaving WSP liable for paying retention money to contractors.
WSP group managing director Chris Cole said it had agreed to take on the work as prime contractor after Hosmark had approached it to carry out multidisciplinary engineering services. Cole said that the decision to act as prime contractor was a 'one off, not to be repeated'.
'Our financial liability to suppliers in respect of unpaid 12 month retentions and other items amounted to £1.2M and this will not be recovered from the client, ' said WSP.
Costs of the Hosmark debacle hit first half profit growth. WSP reported pretax profits of £6.4M for the six months to 30 June 2002 compared with £6.3M in the same period last year.
Turnover increased from £96.2M to £138.2M, boosted by the acquisition last year of Jacobson & Widmark.
Profits were also depressed by property downturns in Europe and the US, although this was offset by an upturn in the transport sectors.
INFOPLUS www. wspgroup. com