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Tilbury Douglas reports £94m loss amid legacy Interserve costs

Tilbury Douglas made a £94m pre-tax loss final yr on account of legacy prices related to its separation from Interserve Group.

The corporate additionally noticed its turnover fall from £463.5m to £405.2m within the yr ending 31 December 2022, with administrators saying a fall in workload “mirrored difficulties skilled in profitable work throughout 2021, arising from uncertainties whereas nonetheless a part of the Interserve Group”.

The contractor, previously one of many largest arms of the £3.2bn-turnover Interserve plc, was spun off from the plc’s successor company Interserve Group in June 2022, although remains to be owned by the identical shareholders.

Income at its development arm shrunk to £392m from £446.9m in 2021.

Tilbury Douglas Holdings Restricted – which incorporates the corporate’s mechanical, electrical and plumbing enterprise Tilbury Douglas Engineering – posted a pre-tax lack of £94m, in contrast with an £11.2m revenue the yr earlier than.

The majority of the loss stemmed from a third-party buyout of its legacy pension scheme, which price it £86.4m. The contractor confused that this was “purely an accounting” slightly than money or buying and selling loss. Over the long run, the buyout removes its obligations from the scheme.

One other £14.7m of restructuring prices pertains to different areas of its separation from Interserve Group.

Tilbury Douglas made an underlying working revenue of £6.2m, though this was nonetheless lower than half of the £12.7m posted in 2021.

The accounts additionally present it made £16.5m in provisions, together with £8m on unnamed onerous contracts and £7.5m on contract rectification.

The entire consists of cash put aside to pay for the dispute it lost with Northumbrian Water alongside Interserve’s former JV accomplice Doosan Enpure final yr due to price overruns, delays and high quality points on the Horsley Therapy Works within the Tyne Valley.

Chair Nick Pollard stated an announcement with the accounts: “Decoupling from the pension scheme, along with the exit from Interserve Group, have eliminated big areas of uncertainty and positioned the Tilbury Douglas Group onto a stable footing.

“In abstract, the brand new Tilbury Douglas Group has returned to be a strongly buying and selling fundamental contractor with a big and rising order ebook, because the underlying buying and selling outcomes present.”

Pollard stated the corporate anticipated its turnover to rise in 2023, forecasting a income of £530m and a return to profitability.

Within the accounts, chief govt Paul Gandy reiterated the contractor’s technique to “proceed to concentrate on these development areas by which it has a confirmed monitor report over a few years”, including that it “won’t be venturing into areas the place the danger profile of the initiatives is considered as too excessive”.

Gandy first outlined the aim in an interview with Construction News in October 2022, the place he confused the enterprise was “sticking to its knitting” by persevering with to concentrate on well being, schooling, highways and water in addition to airports, R&D and manufacturing.