Tilbury Douglas made a pre-tax loss of £94m last year due to legacy costs associated with its separation from Interserve Group.
The firm also saw its turnover fall from £463.5m to £405.2m in the year ending 31 December 2022, with directors saying a fall in loading of work “reflected the difficulties experienced in gaining employment during 2021, arising from the uncertainties while still part of the Interserve group”. “.
The contractor, formerly one of the largest arms of Interserve plc, with a turnover of £3.2 billion, was demerged from the plc’s successor company, Interserve Group, in June 2022, although it is still owned of the same shareholders.
Revenue from its construction arm fell to £392m from £446.9m in 2021.
Tilbury Douglas Holdings Limited, which includes the mechanical, electrical and plumbing business of Tilbury Douglas Engineering, posted a pre-tax loss of £94m, compared with a profit of £11.2m last year previous year
Most of the loss came from a third-party buyout of its legacy pension scheme, which cost it £86.4m. The contractor stressed that this was “purely an accounting” rather than a cash or business loss. In the long term, the purchase removes your obligations from the scheme.
A further £14.7m of restructuring costs relate to other areas of its separation from Interserve Group.
Tilbury Douglas made an underlying operating profit of £6.2m, although that was still less than half the £12.7m posted in 2021.
The accounts also show he pocketed £16.5m in provisions, including £8m in unnamed onerous contracts and £7.5m in contract rectification.
The total includes money set aside to pay for the dispute it lost with Northumbrian Water along with former Interserve partner Doosan Enpure last year over cost overruns, delays and quality issues at the works of Horsley treatment in the Tyne Valley.
Chairman Nick Pollard said in a statement with the accounts: “The de-coupling of the pension scheme, together with the exit of Interserve Group, have removed large areas of uncertainty and placed the Tilbury Douglas Group on a strong footing.
“In summary, the new Tilbury Douglas group has returned to being a strongly traded prime contractor with a significant and growing order book, as shown by the underlying trading results.”
Pollard said the company expected its turnover to increase by 2023, forecasting revenues of £530m and a return to profitability.
In the accounts, chief executive Paul Gandy reiterated the contractor’s strategy to “continue to focus on those areas of construction in which it has a proven track record over many years”, adding that it “will not venture into areas where the risk profile of the projects is considered too high”.
Gandy first described the goal in an interview with Construction news in October 2022, where he highlighted that the business was “holding onto its fabric” by continuing to focus on health, education, roads and water, as well as airports, R&D and manufacturing
