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Wembley developer doubles profits

17/08/2006

The developer of the repeatedly delayed Wembley Stadium project has more than doubled its annual profits.

Australian building firm Multiplex said that profits across its construction division had fallen as a result of losses incurred in respect of problems concerning the new £757m London stadium.

However, the company's overall performance was boosted by asset sales and an increase in the value of the property it owns.

Multiplex said that its net profit was A$216.8 million (£87 million) in the year to June, up from A$84.3 million (£34 million) a year earlier.

The firm said that it had incurred a total loss of A$364 million (£147 million) before tax on the Wembley project over the year, resulting in an annual loss of A$320 million (£129 million) before tax for its construction arm.

In a statement accompanying its results, Multiplex said that work on the stadium, which is now due to open two years behind schedule in June 2007, was almost complete.

The company is also continuing to try and recoup some of the losses it has incurred on the project from other businesses, following a successful claim made against its former steel subcontractor, Cleveland Bridge.

"Wembley is now substantially complete and the group is focusing on pursuing recoveries from third parties," said Multiplex.

The company, which has increasingly been selling assets to finance cost overruns and delays at Wembley, said that profit for its property trust more than tripled to A$447 million (£180 million), with more than half of the amount based on property revaluations and asset sales.

But despite posting a healthy profit, Multiplex warned that it expects to complete fewer projects in 2007.

Meanwhile, the group also announced today that it had agreed to transfer responsibility for its White City shopping centre development to the construction firm, Westfield. The move, under which Westfield will assume responsibility for remaining design and construction work at the site, will reduce Multiplex's UK development pipeline by almost a quarter to A$7 billion (£2.8 billion).

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