Morrisroe has reported a loss for the second year running – and said its 2022 loss was worse than previously realised.
Morrisroe Group made a pre-tax loss of £1.3m in 2023, lower than the £6.9m loss reported last summer. However, the group has also made a ‘prior period adjustment’, retrospectively increasing its 2022 pre-tax loss to £11.5m
In an executive summary, group chief executive Brian Morrisroe said the adjustment came after “an unforeseen matter on one of our concrete frame schemes which gave rise to an increase in cost not previously forecast”.
He added the group had since reviewed all legacy projects and also made adjustments due to two more schemes where “cost forecasts were found to be inaccurate giving rise to additional costs which should have been considered in the prior year”.
His statement also said 2023 was a “mixed year”, adding that his company is now in “a substantially improved position as compared with the previous year as we emerge from a somewhat exceptional period in our trading history”.
The group made a loss last year as material inflation “remained relatively high” and damaged margins in the main structures business due to commitments made under “legacy fixed price contracts”, he said.
The group’s plant business was also negatively affected by inflation while the group’s newly-bought demolition business – previously known as Cantillon – made a pre-tax loss of £515,000 after seeing its revenue more than halve from £34m to £16m.
However, the company’s joinery businesses “have continued to go from strength to strength”, according to Morrisroe, working for Multiplex on high-profile London tower projects such as One Nine Elms and Western Yards.
Morrisroe said the group’s “strong balance sheet and cash position provided protection in the [2013] period, enabling us to absorb the ongoing inflationary impacts brought about by fixed price contracts”.
“We expect to continue on our positive trajectory to normal profitability in future years, with new contracts being secured with more reasonable risk sharing terms, and now that supply is less of an issue, many of our material suppliers have begun to offer fixed price arrangements,” he added.
He added that there is increasing interest for procuring a “front-end cluster” – whereby clients engage a range of related specialist contractors early, for instance Morrisroe’s appointment to carry out demolition, enabling and piling works for a mixed-use scheme in White City.
Morrisroe Group made provisions of £6m for the year, of which £4.3m was restated a year earlier. This included £2m for a fine and court costs relating to the Competition and Market Authority’s investigation into bid rigging in the demolition sector.
