Civil engineering contractor Alun Griffiths has posted a pre-tax loss for the fourth year in a row.
The Abergavenny-based company posted a loss of £20m in the year to 31 December 2022. While this was a significant improvement on the previous year’s loss of £38.1 million, it means the company has not made a pre-tax profit since 2018 and has lost £74.5m in the past four years.
Alun Griffiths said its performance in the first half of 2022 “continued to be affected by the consequences of the Covid-19 pandemic”.
In addition, the conflict in Ukraine and political instability in the UK were affecting operating margins on key contracts, the accounts said.
The 2022 accounts contain provisions of £18.3m, including £17.5m related to contracts that “have become onerous due to contractual challenges with rising inflation and design reviews”.
Despite the risk of continued disruption, the company expects a “resilient” year in 2023, “underpinned by a stable infrastructure pipeline.”
The management report says that “the medium and long-term outlook remains positive for the company”, given the level of investment required by major infrastructure projects.
The company reported net liabilities of £78.3m at the end of 2022, compared with £58.3m in 2021 and £20.2m in 2020.
During 2022, Alun Griffiths, which is a subsidiary of Tarmac, launched a five-year strategy, reviewed key contracts and introduced a new business improvement plan.
This led to changes in direction, including the appointment of former Farrans director David Parr in January.
The company also follows a policy of “strict cost control in both contract operations and support functions.”
Its turnover in the most recent accounts was £301m, up from £279.9m in 2021.
Carmarthenshire County Council recently tried to withhold £3.3m from Alun Griffithssaying that he was owed money, and that there was a risk that the contractor or Tarmac would never pay them, as they are “insolvent on the balance sheet”.
However, a judge ruled that the payment should be made and criticized the council’s “spurious objections” to a guarantee provided by Tarmac.
In its 2020 accounts, Alun Griffiths posted a pre-tax loss of £11.6m. At the same time, it restated its 2019 performance as a pre-tax loss of £4.8m, having previously posted a pre-tax profit of £1.8m for the year .
The 2020 accounts explained that there had been a restatement of the company’s performance in 2019 to correct previous errors “dating back to 2019”.
This led to a £6.6m downward adjustment to the pre-tax profit figure. The accounts explained that “unbilled revenue was found to have been overstated for specific contracts, and contract accruals and provisions were understated for specific contracts.”
