Ardmore has blamed inflation, supply-chain failures and “some poor management” as the reasons it suffered a £10.8m pre-tax loss for the year ending 30 September 2023.
Newly released financial results show that the main contractor’s turnover dropped to £403.1m from £435.1m – falling far short of the £447.8m it expected at the start of the year.
Ardmore also plunged into the red after posting a £6.5m pre-tax profit 12 months earlier.
Managing director Patrick Byrne said in a statement with the accounts: “Reflecting on the events that have contributed to the disappointing results we can point largely to three factors: supply-chain inflation, supply-chain failures and some poor management.”
He added: “Difficulties building momentum on four key jobs and delayed contract awards both contributed to the shortfall.
“While inflation has eroded margin across all jobs, the supply-chain failures have heavily impacted the margins on three key projects. Two of these three reacted well to the failures but the other fell well short. Following an internal review, several structural changes have been made to avoid a recurrence.”
The group made provisions for £62.1m relating to losses on live contracts.
It also recognised an impairment loss of £256,000 regarding “bad and doubtful trade creditors”.
The specific projects and subcontractors are not named in the accounts, nor are examples of poor management given.
Byrne said the two remaining problem jobs were expected to be completed within the first quarter of its current financial year.
Ardmore’s total provisions nearly doubled in the year, reaching £120.6m, compared with £62.1m in 2022. £73.9m of the total relates to remedial work on completed projects, a rise of £26.9m from the previous year.
The group also has property interests and manufactures joinery, steel and masonry products.
Ardmore’s steel division was loss-making in 2022/23 and manufacturing activities as a whole slowed down in the year. Byrne said this slowdown was “expected to be a temporary situation”, however.
He added that the company’s construction order book was “very good”, with recent awards of five contracts worth a combined £530m, and that revenue of around £400m “should be achievable” in 2024.
Recent wins for Ardmore included a £50m office retrofit in central London for client LS Estates and a £75m contract to deliver four residential blocks near Hackney Wick station in east London.