No plans for sale of troubled contractor as it makes second half profit
Morrison posts £7.6m loss
Repairs and maintenance contractor Morrison has posted an improved set of second half financial results in the face of continued rumours about the future of the company.
Morrison made an operating loss of £7.6 million for the full year to 31 March 2012 but this was after posting a loss of £12.7 million in the first six months of 2011/12. This means it turned an operating profit of £5.1 million in the second half. In 2010/11, it made a profit of £5.2 million.
This year’s losses were the result of a costly restructuring process that led to the loss of nearly 500 jobs in the first six months of the year.
Guy Wakeley, chief executive of Morrison, said: ‘The reason for the loss in the first place was managing stacks of work at lower prices. Market prices have come down by 20 per cent so we need fewer costs too.’
He also moved again to deny rumours that parent company Anglian Water was on the brink of selling the group.
‘In the current economic market it’s not a good time to sell a business,’ he said. ‘Anglian’s plans are to hold on to it for the foreseeable future.
‘Trading has recovered. We took a lot of pain in the first half [of the year] and now we’re on the up again.’
Morrison was recently forced to sign up to an improvement plan for the delivery of a £35 million a year repairs and maintenance contract with Leeds Council, with the council is due to decide on whether to continue the contract later this month. This follows the loss of a £9.5 million a year deal in Southwark in April and earlier threats from Birmingham Council to terminate a £3 million a year contract.
Mr Wakeley defended the firm’s performance in Leeds, claiming that its ‘failings’ have been down to the implementation of a whole new delivery model for tenants’ repairs.
‘Is it a problem? Yes. But it’s a problem that has to be fixed together,’ he said. ‘We support Leeds’ action as the service needed improvement.’
Turnover for the group increased by 6 per cent in 2011/12, growing from £275 million to £291 million. Its order book for the 2012/13 financial year is worth more than £1.2 billion.
Morrison has also just agreed a three-year extension to a contract with a Manchester Council joint venture, Manchester Working, to take the £40 million a year deal to August 2016.
Last month it won preferred bidder status for two of six contracts awarded by Circle in a deal worth around £200 million over five years.
net job losses in 2011/12
group turnover during 2011/12
operating loss during 2011/12
operating profit in six months to 31 March 2012