UK contractor Sir Robert McAlpine has announced a £23m pre-tax loss in the year to 31 October 2017, after problems on three energy projects.
McAlpine made "considerable" losses on the contracts, for which it had to set aside £37m worth of exceptional items in its annual accounts, filed at Companies House, reports Construction Manager.
The main issues were with the energy-from-waste sector, which McAlpine is now abandoning – following the same path as services specialist Interserve, which announced a £244m loss in April partly as a result of energy-from-waste, and US firm Air Products, which racked up a $1bn loss in the sector (see further reading).
Revenue at the business was up 5% for the year to £892m, and underlying profit was £14m. The company also said it had its strongest secured order book for 10 years.
Cullum McAlpine, a director of parent Newarthill, said: "Over the course of 2017, Sir Robert McAlpine worked on three energy projects, all of which have incurred considerable losses.
"Two of these were ‘energy from waste’ projects, which were completed during the year; the final accounts have been agreed with the client and all claims settled. The last project is forecast to be completed by October 2018."
Chief executive Paul Hamer, who joined Sir Robert McAlpine in July last year, has led a strategic review into the market sectors in which the company operates. He said: "Although our 2017 financial results are disappointing and directly attributable to our exposure to the waste-to-energy sector, I am encouraged that our reinvigorated focus on engineering and operational excellence is already having an impact on our business performance.
"Our results for the first six months of 2018 are in-line with budget and our secured order book is stronger than it has been for the last 10 years."
He added that the company would build upon its strengths in key sectors such as commercial offices, build to rent, health, retail and education. It will also place a focus on technology and creative digital innovation.
Image: Waste to energy has proved to be a risky investment in the UK (Dreamstime)