Troubled John Lelliott in talks with bankers: Builder awaits decision on further support
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Your support makes all the difference.JOHN LELLIOTT, one of the largest private building firms in Britain, is in talks with its bankers. A decision on whether they will continue to support it is due by the end of the week.
The company would not comment on the negotiations, but the group's problems are believed to stem from the failure of Point West, an ambitious plan to convert the former west London air terminal into a luxury apartment block. The development company went into administration two years ago, and John Lelliott, which had a pounds 70m management contract on the block, was suing for the recovery of money due.
Sources within the building industry said there had been persistent rumours about Lelliott's financial difficulties in recent weeks, and it is believed it was having trouble meeting payments to sub-contractors. Its accounts for the year to June 1991, the most recent available, showed borrowings of pounds 12m compared with just pounds 1.1m of net assets.
Meanwhile, Higgs & Hill, the property, housing and construction group, cut its losses from pounds 16.7m to pounds 11.6m in 1992. It also cut its dividend for the second year running. The final dividend was halved to 1.5p, for a total payment of 2.5p, down from 9p last time.
At the trading level, the group broke even, compared with a pounds 4.2m profit last time. But there were exceptional write- downs of pounds 11.9m ( pounds 16.7m), largely because of further falls in the value of housing land and commercial property.
It has also written off, as part of a pounds 10.2m extraordinary charge, its share of a joint venture developing a Bolton shopping centre, where renting has been difficult.
The group's construction business swung from a pounds 2.6m profit to a pounds 2.2m loss as the workload fell and margins tightened. The group said it would be a 'tough struggle' to return the division to profit this year. Housing profits rose from pounds 295,000 to pounds 2.5m because of the sale of a site to a retailer.
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