Speymill, the property fund manager and contractor controlled by Jim Mellon, resumed trading on AIM today as it reported grim results from its construction arm.
The company had its shares suspended from trading in January so that it could assess its financial position, but returned to the market today with the news that it suffered a £6.3m pretax loss last year compared to a £3.1m profit in 2007.
These losses were attributed to a pretax loss of £11m at Speymill Contracts which it said had been ‘badly affected by the recessionary environment in the UK including multiple subcontractors and clients being placed in to administration.’
It said it would take ‘urgent action to reposition and downsize the business including important changes to strengthen the management stucture’.
The restructuring included a shakeup of the boards of both Speymill and Speymill Contracts.
Andrew Latham has resigned as managing director of Speymill Contracts and from the board of Speymill with immediate effect, and has been replaced by John Chambers and Ron Parsons who will be joint managing directors of Speymill Contracts.
Lincoln Forrest has been appointed to the board of Speymill as a non-executive director – as has Howard Flight, the co-founder of Guiness Flight, and non-executive chairman of Speymill since 2005.
In contrast, the group’s investment and property management operations performed better than expected, producing a profit a before tax of £5.3m last year – up from £2.9m in 2007.
The company has drawn £1.4m of the £3.3m loan made to the company by Speymill directors Jim Mellon and Bob MacDonald in January to ensure that it does not breach its loan covenants.
It said that the loan could be converted in to preference shares.
Jim Mellon, chairman of Speymill, said: ‘2008 has been a year of both success and great disappointment for the group.
'The events at Speymill Contracts should not be allowed to obscure the excellent results that have been achieved by our asset management and property management businesses.’