Wembley builders announce doubling in net profits

The Australian construction company responsible for building London’s much-delayed Wembley Stadium announced a doubling in annual net profits today.

The Australian construction company responsible for building London’s much-delayed Wembley Stadium announced a doubling in annual net profits today.

The improvement to AUS$216.8m (€129.3m) came despite Multiplex taking losses in the year of AUS$364.3m (€217.3m) on the troubled Wembley project, which is due to open 18 months later than planned in June.

The financial blow from the Wembley scheme is in line with projections given by the company in December.

It said today: “Wembley is now substantially complete and the group is focusing on pursuing recoveries from third parties.”

In June a UK High Court judge ruled in favour of Multiplex on key issues relating to breach of contract in a dispute with steel contractor Cleveland Bridge.

But Mr Justice Jackson stressed that neither party had won an “outright victory” and urged both sides to reach an overall financial settlement by negotiation or mediation.

Multiplex, which blames Cleveland at least in part for the delays that have hit the building of the £757m (€1.1bn), 90,000-seat stadium, had sought up to £45m (€66.4m), including damages, from Cleveland.

Darlington-based Cleveland, which walked off the site in August 2004 citing breach of contract, counter-claimed £22.6m (€33.3m).

Earlier this month Multiplex said the likely completion date on Wembley had been pushed back because it claimed Wembley National Stadium Limited (WNSL) had not yet started work for which it was responsible.

Multiplex said it had consulted an expert in the operation of major stadia, who indicated it was unlikely that the stadium would be able to hold a test event before June.

It added it had advised WNSL of its entitlement to extensions of time to October 2007.

The last remaining seats are due to be installed early next month, while work remains to be done on drainage, the roof and building management systems.

In its annual results today, Australia’s largest commercial builder and contractor said revenues and other income fell 4% to AUS$3.18bn (€1.9bn) but was helped in the year to June 30 by an upward revaluation of the company’s investment properties to AUS$267.7m (€159.6m).

The company said it had “sound” prospects for the current financial year, but added that many building projects are due for completion in 2007/2008, meaning fewer completions in the current year and lower earnings in the short term.

Multiplex also said it had agreed for construction company Westfield to assume full responsibility for the remaining design and construction works at its White City shopping centre project in London.

Despite the transfer of White City, Multiplex will still retain a sizeable UK portfolio with a completion value in excess of AUS$7bn (€4.2bn).

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