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Writedowns push Tarmac into red

Heather Connon
Tuesday 27 April 1993 23:02 BST
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TARMAC, Britain's biggest housebuilder, lost pounds 350.3m in 1992 as it made pounds 372m of provisions and writedowns against its businesses, writes Heather Connon. But the City focused on its potential for recovery and marked the shares up 8p to 141p.

Neville Simms, who took over as chief executive last February, said he was pleased to have achieved an operating profit, before interest and exceptional charges, of pounds 80.3m, down from pounds 129.3m last time.

But he added: 'Tarmac had to change and tailor itself to the new marketplace. Dramatic change does not come without dramatic cost.'

The biggest provision was a pounds 145m writedown of its property portfolio, designed to allow it to withdraw from the business by the end of next year.

Sir Eric Pountain, chairman, said there were 'genuine signs of recovery' in some of the group's markets. It has increased prices of its quarry products business by between 4 and 7 per cent - although that just puts them back to the levels of a year ago. It is also seeing a 'slight firming' in prices achieved on house reservations.

Debt fell by pounds 40m to pounds 577.1m despite a pounds 106.3m rise due to exchange rates, helped by pounds 138m of disposals. The dividend was held at 5.5p via a 2.5p final, although it all had to be paid for from reserves.

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