Acquisition sets Conder back pounds 34m

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The Independent Online
THE pounds 2m acquisition in 1989 of Elemeta, which makes curtain cladding for businesses, has cost Conder Group, the construction company, pounds 34m in provisions and contract losses in three years.

Conder yesterday revealed that it lost pounds 22.6m in the year to last December, up from pounds 19.3m the previous year, and said it was in talks with its bankers.

The group would not reveal the level of debt, although it is believed to be substantially below the pounds 20m disclosed at the end of 1990. Net assets of pounds 7.6m then will have been wiped out by the pounds 19.4m after-tax loss in 1991.

Alan Lovell, chief executive, said National Westminster had been 'extremely supportive'.

The group's accounts are unaudited because KPMG Peat Marwick is unable to express an opinion, until the negotiations are finalised, on whether the accounts should be prepared on the assumption that the group will remain a going concern.

Elemeta accounted for pounds 8.3m of the 1991 loss. In the previous year it lost pounds 22.2m.

Other businesses acquired in 1989 made losses, including closure costs, of pounds 9.2m.

Elemeta's losses largely resulted from two projects at Broadgate in the City and One America Square, Canary Wharf. Mr Lovell said the two contracts, negotiated before the business was acquired in 1989, were worth pounds 25m, but cost pounds 56m to complete.

The group is negotiating the disposal of IEI, its mechanical and electrical contracting business, which contributed pounds 34m of last year's pounds 183m turnover and was 'very profitable'. That will leave a structural steel business, a design and building contractor and a US canopy maker.

Conder is confident these losses have been eradicated. It added that costs had been cut from pounds 42m to pounds 25m and further reductions were in progress.

Although it made a loss in the first half, May and June were profitable and it expects to make a profit in the second half.

The shares fell 5p to 8p.