North Midland Construction has become the latest contractor to issue a profit warning as the UK market continues to decline.
In a trading statement the firm referenced last week’s government figures that showed that UK construction industry output has slumped to its lowest level for more than 13 years, with 2012 third quarter output 11.3% down on last year.
It said this decline was having an adverse effect on certain sectors of the group’s business and that as a result year end revenue and profit will be slightly below management expectations.
The firm’s highways and utilities divisions have been worst hit.
The highways division has been affected by delays in the commencement of secured contracts and public expenditure cutbacks, most particularly on its existing frameworks. The division remains profitable, but both profit and revenue will be below that of the previous year.
The utilities division has been severely affected by a significant downturn in expenditure by the telecommunications companies. The division has re-organised and downsized to accord with current market conditions. Losses continue to be incurred, but on a reduced scale.
The Group’s order book for 2013 stands at £90M compared with £70M the same time last year.