Mowlem accounting overhaul ‘substantially complete’

Troubled construction group Mowlem has confirmed that it will overhaul its
accounting rules for recognising contract income, after conducting a detailed
review of profit recognition and contract valuation.

The announcement comes after four profit warnings and a £20m profit
writedown, which came as a direct result of recognising project revenues too

The review of accounting for contract revenues has been overseen by Mowlem’s
new FD Paul Mainwaring, and from now on the company will adopt a ‘more prudent
and consistent accounting rules for recognising income on contracts’.

The change will see Mowlem make a £70m adjustment to contracts on its balance
sheet as at 31 December 2004. The group said that more details on the review
would be released on 28 September when Mowlem released its interim results.

Mowlem said its order book was steady at £2.3m, but added that it was
unlikely to pay an interim dividend.

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