North Midland’s trading update is mixed. The company details unexpected losses of £3.1m relating to the resolution and conclusion of a number of legacy contracts. However, stronger than expected underlying trading has offset some of the impact of these losses. The company now expects to achieve reported PBT of c.£0.6m for the year to 31st December 2015 vs. our forecast of £2.0m. North Midland has been dogged by a number of legacy contracts, but after today’s statement, only one problematic contract remains. This de-risks the business and should allow the management team to focus its efforts on further improving the Group’s underlying trading performance.
