Amey reports £190m loss due to Birmingham roads contract dispute
Amey has reported a £189.8m pre-tax loss for 2017 after being forced to make a provision of more than £200m for its problem roads contract with Birmingham City Council.
The infrastructure support services group is currently paying penalties averaging £4m per month and its Spanish parent Ferrovial has had to put a £208m provision into its accounts to cover additional costs relating to its highways contract with Birmingham City Council following a long-running payment dispute over quality of works.
Without this project, the business reported a £36m operating profit, boosted by £65m profits from its rail and consulting division, on stable revenue of £2.2bn.
Highways, utilities and environmental services divisions suffered losses of £14m, £23m and £15m respectively.
Andy Milner, chief executive of Amey, said: “Throughout the year, we continued to reduce our exposure to risk across the business by negotiating an early exit to a number of loss-making contracts in facilities management, highways, utilities and environmental services.
“This deliberate programme combined with business turnaround activity has substantially increased the stability and predictability of the business.”
Milner added: recent communications with Birmingham City Council make it clear that an exceptional provision of £208.5m needs to be accounted for in our 2017 results.
“Despite the difficulties Amey has faced on the Birmingham contract, 2017 has been very positive for the business and completes a significant part of the evolution of Amey.”