Thursday, 23 October 2014

Contractor denies takeover talk

A leading repairs firm has scotched rumours that it is on the brink of being sold following the loss of a major London contract and concerns over its performance.

The Daily Mail yesterday reported that Morrison is set to be put up for sale by owner Anglian Water after Southwark Council terminated a contract worth an annual £9.5 million three years ahead of schedule.

But the company has ruled out a sale, calling the reports ‘entirely untrue’.

Morrison suffered pre-tax losses of £12.7 million in the first six months of the 2011/12 financial year, although it has said that it expects an improved performance for the second half.

A spokesperson for the contractor added: ‘In common with many businesses operating in the public sector, Morrison restructured in 2011 which affected the first half year financial performance.

‘However, as a result of this action, the business is now trading in line with management expectations and has ended its financial year with very significant free cash balances, no leverage and a sector leading credit rating. These factors combined with unprecedented visibility of future sales, with all forecasted revenues for 2012/13 secured and the support of a strong asset-backed parent puts it in a good position for a profitable year ahead.’

In January, Birmingham Council threatened to reconsider a five-year deal with Morrison amid worries over substandard performance. Although the threat has been lifted, a council spokesperson said the contractor was ‘still under probation’.

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