Carey Group, an Irish-owned UK-headquartered construction company, has reported a £17.1m (€19.8m) plunge in pre-tax profits following two "significantly under-performing" contracts here.
PJ Carey Contractors, the Irish contracting subsidiary of Carey Group, reported a €16.7m operating loss for the year ending March 2019.
The parent group, which still posted a profit before tax of £1.6m, said the "disappointing performance" of the Irish subsidiary offset strong returns in other parts of the business and contributed to the lower profit this year.
In its annual report, Carey Group said it had carried out a strategic review of its Irish subsidiary. It said the decision to review the subsidiary was a result of its performance falling "below the expectations of the shareholders".
The review concluded earlier this year and resulted in a "number of immediate actions" being implemented. Carey Group said the Irish business would be supported to continue to deliver the work it was carrying out in line with the company's standards.
Carey Group is committed to working with its clients on the two Irish contracts to recover its "full entitlement through the mechanisms of the contract". PJ Carey is expected to return to gross profit next year.
Results for PJ Carey, which was awarded a contract in 2018 to build the N59 Kilmeena Road Realignment Scheme from Westport to Mulranny, show the company had revenue of more than €36.1m in the year ending March 2019, up from €28.4m previously.
Carey Group would not comment on which contracts it suffered the losses on. It highlighted that its UK demolition contractor suffered a £4.2m loss, which also contributed to the group's lower pre-tax profit. Founded in 1969 by Irish brothers Pat, John and Tom Carey, it reported combined revenue of more than £575.3m in the year ending March 2019, up from £510.5m.
The firm, which was previously responsible for work on the Olympic Park in London, employed an average of 1,506 people across its subsidiaries.
In a statement, joint CEOs Jason and Tommy Carey said: "While we faced some challenges during the year, we were quick to take action to ring-fence the issues and decisively address them.
"We are satisfied that the whole business is now fit for growth. We finished the year with a positive cash position and, combined with our low gearing, (this) reflects our prudent approach to continued and stable growth."