JOHN LAING this week confirmed that it had set aside a massive £26.1M to cover losses on the troubled construction of the Cardiff Millennium Stadium.
The provision means that in the 12 months to 31 December last year the construction division made a £24.4M loss on a turnover of £1.19bn.
The news came as Laing confirmed that the new stadium would not be complete by the date of the first game scheduled to be played there.
However, it insisted that the ground, built on the site of the former Cardiff Arms Park, would open with a reduced capacity of 40-50,000 to host the friendly between Wales and South Africa on 26 June.
Pre-tax profits for the group were £20.1M, down from £32.2M for 1997 on a group turnover up 10% to £1.6bn. Deputy chairman Robert Wood said: 'The disappointment arises solely because of Cardiff. We are seeking to recover any losses where we can but the focus is on opening the stadium.'
Results showed that Laing has also set aside £5.1M for the recent reorganisation of its construction activities. The changes have been made largely to avoid similar problems to those on the Cardiff project, where the fixed price contract has substantially escalated in cost.
Wood said that Laing had 'learned some lessons' from the Cardiff project but was still keen to bid for fixed price work.
The emphasis now would be towards more partnered, negotiated work and fee work if necessary at the expense of turnover, he added.
No provision was made against potential losses on the privately financed Midland Metro contract. As part of the Altram joint venture, it looks set to face a multi-million pound bill for late opening (NCE 11 March). Wood refused to confirm expected losses and said only: 'We are not exposed to any risk on construction value.'
Elsewhere in the group, the housing division buoyed figures by returning pre-tax profits of £31.5M, up 44% on 1997 from a turnover of £361M compared to £240M in 1997.