Stepnell accounts hit by £30m of problem contracts

Grant Prior 4 years ago
Share

Stepnell has restated its 2019 accounts by £30m to reflect “grossly underestimated” forecast losses on problem contracts.

The adjustment means a previously stated small pre-tax profit for the year to March 31 2019 now becomes a £29.9m loss.

The updates were revealed in the firm’s latest results posted at Companies House.

External consultants were brought in by Stepnell directors to review contracts.

The company said: “In an number of instances, forecast losses on challenging contracts had been grossly understated.”

The strategic report at parent company Stepnell Holdings said the problems had been caused by “poor management procedures and inconsistent pricing.”

It added: “The directors have therefore had to remove under-performing staff, reduce the number of regions from five to three and impose tighter management controls on cash management, bidding and various construction activities.

“Directors are confident that the final legacy projects are being worked through and that the losses these projects have inflicted on the company are now under control.

“Directors expect Stepnell to return to profit in the current year.”

Latest results for the year to March 31 2020 show a group pre-tax loss of £3.4m from turnover of £127.6m.

Tom Wakeford, joint managing director of Stepnell said: “In 2019, we were impacted by onerous ground conditions on our largest project, which has proved expensive to remedy.

“We have taken a prudent position in our accounts, allowing our team to focus on the financial recovery on the project. March 2020 saw a write down of legacy contracts due to Covid-19 which had a profound effect on our clients and our sector as a whole.

“Therefore, 2019 and 2020 were difficult years for different reasons. The 2019 losses are now more than two years old and Stepnell looks very different, in a very positive way, in 2021, with an anticipated rise in profit to around £1 million.”

Latest news

Blenheim House payout hopes fade as claims hit £33m

Suggested 10p in the £1 payout for subcontractors now unlikely
6 hours ago

£1.3bn decarbonising and fire safety deals out for bid

South East Consortium starts hunt for firms for housing upgrade work prize
6 hours ago

£30m turnover M&E contractor files administration notice

TNA Electrical makes administration application
7 hours ago

Plan for first big offices at £1.7bn Manchester innovation hub

500,000 sq ft of offices planned at renamed Sister development
6 hours ago

Murphy starts work on £2.5bn Eastern Green Link 1

Giant subsea electricity cable project will take three years to build
6 hours ago

Subcontractors wanted for work across Birmingham

Latest Constructionline event: Register now
6 hours ago

Acheson Construction files administration notice

£53m turnover South West contractor lodges court notice
1 day ago

Hunt for 10 firms to deliver £37bn new hospital plan

Race starts for mega-framework with pledge to spread work among all firms
1 day ago

Springfield to build homes for army of green energy workers

Scottish house builder sells 2,480 plots to Barratt Redrow in strategy switch
1 day ago

Preferred bidder for Stoke city centre scheme

Genr8 Kajima to build Etruscan Square scheme in Hanley
1 day ago

BAM go-ahead for £56m Glasgow leisure centre

Work to start on East Renfrewshire complex later this year
1 day ago

Network Rail fined £3.75m after double track worker death

Michael Lewis and Gareth Delbridge were killed while working on rail line in Wales
4 days ago

Local contractor Castle lands £60m South Shields campus

Work to start this summer on new home for South Tyneside College and South Shields Marine School
4 days ago

GRAHAM wins £100m deal after safety regulator approval

Dyecoats scheme in Leeds becomes one of first to receive Building Safety Act Gateway 2 green light
5 days ago

London Super Sewer now fully connected

10-year construction programme draws to a close
4 days ago

McLaren signs off £125m London Bank over-station job

Developer Helical secures funding deal for 8-storey office job
4 days ago

Work on Labour’s new towns to start by 2029

More than 100 sites put forward for a dozen new town locations
5 days ago

Unite hails 12 years without a site accident at Battersea

More than 4,000 union members have worked on the redevelopment without a single serious accident
4 days ago

Housing orders surge offers hope after 5.2% new work fall last year

Housing orders surged 24% in final quarter of 2024 as developers release schemes
5 days ago

McLaren Property gets new Construction Director

Jon Mangham joins from Equans
5 days ago

BAM Construction suffers £40m loss after Co-op Live setback

Civils business profit surges 24% to £80m
5 days ago

Over 150 jobs axed as J S Wright goes under

Insolvency specialist FRP Advisory goes in at Birmingham M&E specialist
5 days ago

Extra cash found to speed-up safety regulator

Government to spend extra £2m to clear backlog of high rise approvals
5 days ago

Galliford Try lands £63m RAF accommodation deal

Work to start within months at RAF Digby in Lincolnshire
5 days ago

Balfour Beatty wins Trent arched bridge job

Briton Fabricators will build the £13m bridge from prefabricated sections
5 days ago

Goldbeck to build new £50m Cardiff County Hall

German-owned contractor vowing to be a "disrupter in the UK market"
6 days ago

Laing O’Rourke chairman to step down

Ray O'Rourke to take over chair from Sir John Parker
6 days ago

Farrans lands Leeds Bradford Airport phase 2 upgrade

Contractor takes follow-on refurb job after terminal extension
6 days ago

ISG built Bristol housing block to be torn down

Contractor's collapse sinks Bristol flats remediation claim
6 days ago

RSK revenue nears £2bn as losses soar to £132m

Refinancing last summer puts group on course for more growth this year
6 days ago

Contractor services