The company said that it had taken a very cautious view of when to take income from rolling contracts on to the profit- and-loss account.
Last year Birse was hit by an pounds 8.5m bad debt, which led to losses of pounds 12.3m. The group's shares eased only 1/2 p yesterday to 19p, despite the large losses and the lack of a dividend for the second year in a row.
The market had discounted the bad news at the time of the interim results.
Peter Birse, chairman, said he believed the worst was now over. 'I am confident that we have put in place the strategy to move the group back into profitability.'
Birse has negotiated a restructuring of its pounds 27m debt with its bankers, giving the group a new three-year facility for its short- term borrowings.
The company planned to dispose of its property assets over that period in an attempt to ease the debt burden, which cost it pounds 4.2m in interest charges. The value of the group's property has been written down to pounds 35m.
Mr Birse said he expected a considerable improvement in the house-building division, which continued to lose money despite a 25 per cent increase in sales. The construction business suffered from pressure on margins and difficulties in getting paid on long-term contracts.
However analysts yesterday forecast a recovery to profits of pounds 1m- pounds 2m in 1993/4.Reuse content