A nationwide building services group hit by legal and contractual issues has seen profits cut by 75 per cent.
T Clarke – which has 16 offices across the UK and says its goal is to be recognised as a top five building services contractor in the sectors in which it operates – reported interim results on 5 August that showed pre-tax profits of £0.2 million for the six months ending 30 June 2014, compared with £0.8 million for the same period last year.
In the interim results, the company provided an update on two “specific issues” affecting it. It said: “A subsidiary company was one of a number of parties that were subject to a substantial damages claim in respect of work carried out in 2007 before it was acquired by the group.
“Damages were awarded against the company, which were settled by the company’s insurers. However, following an unsuccessful appeal the apportionment of costs exceeded the insurance cover in place. The subsidiary company has entered into dialogue with the other party in order to negotiate a full and final settlement.
“We reported previously that we completed a major project in our Mission Critical division and that the final account settlement was proving difficult to conclude. At this stage discussions are progressing at a senior level with the principal contractor.”
It said that its cash position continued to be “adversely affected by the prolonged final account negotiations in respect of the project in our Mission Critical division”.
The group has cut its interim dividend per share to 0.5p, down from 1p in 2013, but chairman David Henderson said: “Encouragingly our forward order book, which has been replenished and strengthened, now stands at £275 million, an increase of over 22 per cent compared to the same time last year.”
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