Galliford Try has suffered further losses on its delayed Aberdeen Bypass project in Scotland plunging the construction arm into the red in the first half of its financial year.
This morning the contractor reported that it had taken a further £26m hit on the Aberdeen Wester Peripheral Route project.
The major road project is now complete but has not been accepted for handover because client Transport Scotland is demanding assurances about future maintenance after cracks previously appeared in parts of the road surface.
Chief executive Peter Truscott said: “Our estimated final costs to complete the AWPR contract have increased as a result of higher than anticipated direct costs, and further delay to completion.
“Constructive dialogue with the client on the significant claims in respect of the contract are continuing.
“Our provisioning for the loss on this project reflects our current estimate of the final costs, and is reduced by an estimate of our share of significant claims against the client and others, which are yet to be agreed and concluded.
“This inherent uncertainty will be resolved only when the project is complete and the claims finally settled.”
The project tarnished a better performance from construction.
Truscott said otherwise construction’s performance continued to be encouraging, particularly on newer contracts, reflecting the business’s careful approach to project selection and risk management.
“We continue to prioritise the quality of each opportunity over volume. We are seeing projects deferred as a result of macro uncertainty, but with 96% of revenue secured for the current financial year and 66% secured for the following year the business has confidence in its prospects.”
Across the group pre-tax profit slipped 4% to £54m in revenue down 5% to £1.42bn.
from Construction Enquirer http://www.constructionenquirer.com/2019/02/13/galliford-try-construction-hit-by-more-aberdeen-bypass-losses/
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