{"id":503241,"date":"2024-07-31T08:00:40","date_gmt":"2024-07-31T07:00:40","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=503241"},"modified":"2025-04-23T16:33:19","modified_gmt":"2025-04-23T15:33:19","slug":"mcalpine-slumps-to-100m-loss-after-multiple-problem-jobs","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/contractors\/sir-robert-mcalpine\/mcalpine-slumps-to-100m-loss-after-multiple-problem-jobs-31-07-2024\/","title":{"rendered":"McAlpine slumps to \u00a3100m loss after multiple problem jobs"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Sir Robert McAlpine plunged to a nine-figure loss after it struggled to adapt to the economic climate and was forced to devalue a number of substantial jobs, its accounts show.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The contractor, also known as<\/span><a href=\"https:\/\/www.constructionnews.co.uk\/contractors\/sir-robert-mcalpine\/\"> <span style=\"font-weight: 400;\">SRM<\/span><\/a><span style=\"font-weight: 400;\">, tabled a \u00a3104.6m pre-tax loss for the year to 31 October 2023, which it blamed on the \u201cchallenging economic environment within the UK construction industry\u201d. In the previous year, it made a \u00a39.3m pre-tax profit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In particular, SRM cited high inflation, supply chain shortages and the \u201cenergy price shock\u201d as the main culprits. The challenging environment forced SRM to devalue four major contracts, it said.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe company had four contracts where the financial position was reassessed in the year and write-downs made.\u201d the accounts state.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe underlying causes were in the main due to the performance of our supply chain partners and the delivery of legacy projects in sectors which no longer fit our strategic direction.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">SRM\u2019s margin dropped to -12.5 per cent, compared with 0.4 per cent the year before. Turnover also dipped below the \u00a31bn threshold for the first time since 2019\/20, at \u00a3880.6m, having been \u00a31.1bn last year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">New chief executive Neil Martin admitted that 2023 was \u201ca challenging financial year\u201d, but said the firm had \u201calready seen a positive shift in performance during the first half of 2024\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Martin, who suddenly<\/span><a href=\"https:\/\/www.constructionnews.co.uk\/contractors\/sir-robert-mcalpine\/mcalpine-ceo-replaced-by-ex-lendlease-boss-16-02-2024\/\"> <span style=\"font-weight: 400;\">replaced long-time CEO Paul Hamer earlier this year<\/span><\/a><span style=\"font-weight: 400;\">, said: \u201cWe have entered the year focusing on client value, operational excellence and a process of derisking the company by targeting quality work-winning opportunities for long-term clients in our core sectors.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">SRM attributed the decline in turnover to its business selection \u201ctighten[ing] in line with [last year\u2019s] strategic review\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The review \u201creaffirmed [SRM\u2019s] focus on key client relationships, risk management, profitability and culture, with a clear focus on those sectors of the market where it has both competitive advantage and a proven record of profitable delivery\u201d, the accounts state.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In an interview with <\/span><i><span style=\"font-weight: 400;\">Construction News <\/span><\/i><span style=\"font-weight: 400;\">last year, SRM chief financial officer Leighton More said adapting and streamlining the firm<\/span><a href=\"https:\/\/www.constructionnews.co.uk\/contractors\/sir-robert-mcalpine\/mcalpine-opens-up-on-recent-restructure-and-profitability-problems-31-08-2023\/\"> <span style=\"font-weight: 400;\">following the review would save around \u00a320m a year<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This year\u2019s accounts reveal that SRM spent \u00a37.8m on implementing the review\u2019s recommendations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">SRM also put aside more money to deal with remediation and high-cost contracts, in the form of \u00a325.9m worth of provisions, compared with \u00a319.9m last year. Most of the increase came in remedial provisions, which SRM expects will be incurred on remedial works on completed contracts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That increased by nearly 50 per cent \u2013 coming in at \u00a313.2m, after totalling \u00a38.9m in the previous year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The firm also set aside \u00a312.7m to deal with \u201closses expected to be incurred through to completion of certain contracts\u201d. This compares with \u00a311m in the previous accounts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, SRM is currently assessing the \u201cpotential financial implications\u201d of the fire that<\/span><a href=\"https:\/\/www.constructionnews.co.uk\/buildings\/crane-operator-rescues-pair-from-mcalpine-site-in-reading-24-11-2023\/\"> <span style=\"font-weight: 400;\">broke out at its \u00a3750m Station Hill redevelopment in Reading<\/span><\/a><span style=\"font-weight: 400;\"> last November.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Two people were dramatically rescued by crane from a roof at the site when the fire caught. The blaze caused project delays, according to SRM.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe potential financial implications of this incident on the project\u2019s final outcome are currently under evaluation,\u201d it said.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sir Robert McAlpine plunged to a nine-figure loss after it struggled to adapt to the economic climate and was forced to devalue a number of substantial jobs, its accounts show. The contractor, also known as SRM, tabled a \u00a3104.6m pre-tax loss for the year to 31 October 2023, which it blamed on the \u201cchallenging economic &#8230;<\/p>\n","protected":false},"author":90643,"featured_media":503245,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[552,542],"tags":[],"class_list":["post-503241","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial","category-sir-robert-mcalpine","issue-online-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.7 (Yoast SEO v26.7) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>McAlpine slumps to \u00a3100m loss after multiple problem jobs | Construction News<\/title>\n<meta name=\"description\" content=\"Sir Robert McAlpine plunged to a nine-figure loss after it struggled to adapt to the economic climate and was 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