Losses up again at NMCN as firm warns on refinancing

Under-pressure civils contractor NMCN has warned it will have to look at “all appropriate options” if it doesn’t get a refinancing deal signed off next month as the firm again revised upwards the amount of money it lost last year.

In an update this morning, the company said it had extended its overdraft facility with its bank Lloyds into next month and added that talks with lenders were progressing.

“The Board has now received heads of terms and is working towards concluding an agreement during June.”

But it warned: “If the Group is unable to secure commitment for the requisite level of funding to satisfy its ongoing working capital requirements, then the Company will need to consider all appropriate options.”

In April, the firm said it had extended a £12.3m overdraft facility with Lloyds until the end of this month and a few days later announced it had secured another £8.9m in a loan made against one of its property development schemes.

NMCN is hoping to tie down a larger financing deal which it said was “more appropriate to the size and nature of the Group’s businesses and risk profile. This has been a core focus of the Board in light of a number of contractual issues exacerbated by the covid-19 pandemic.”

In this morning’s update, the firm said losses from last year had gone up a third time to £24m, having been revised upwards from an original projected £15m loss, announced last autumn, to £16.5m at Christmas and then in February to £22m.

New chief executive Lee Marks, who joined the firm last week from NG Bailey to replace John Homer who left last September, has promised its delayed 2020 results by the end of June.

The firm has been hobbled by two loss-making water jobs which it said would hit current year numbers as well as problems at its building arm.

It added that £6m of the predicted £24m loss was being made for 2019. For 2019, NMCN posted a pre-tax profit of £7.4m on turnover of £405m.