wembley losses plunge multiplex into red

"Multiplex Group's troubled Wembley Stadium project has plunged the construction group into a $120 million first half net loss.

Just two days after learning the prestigious FA Cup Final in May will no longer be played at Wembley, Multiplex has now revealed the final losses from the project are STG183 million ($A434 million), before tax.

Multiplex already took a hit from the losses last financial year, but the bulk - $358.2 million before tax or $250.7 million after tax - has now been booked into its accounts, sending it to a net loss of $119.6 million for the first half of 2005/06.

That compares to a net profit of $7 million in the previous corresponding period.

Chief executive Andrew Roberts described the Wembley losses as "extremely disappointing", but has promised that this will be the end of losses on the massive project.

"We believe this represents the final loss impact on Wembley," Mr Roberts told an analysts' briefing, flanked by the group's new chief financial officer Bob McKinnon, who was one of a number of new additions to Multiplex's management in recent months.

"We are not expecting any further deterioration beyond this loss."

Multiplex has also made the "prudent" decision to include all potential damages that it will have to pay for the late completion of Wembley - which was originally due to be finished by January 31 - even though these are still under negotiation with the English Football Association (FA).

These late fees come to $23.7 million, after tax.

Multiplex is now working towards a May completion date for the stadium, even though the FA has already decided that the FA Cup Final on May 13 will be played at its back-up venue, the Millennium Stadium in Cardiff.

Millennium has hosted the event for the past five years while Wembley - the spiritual home of English football - was rebuilt by Multiplex in a $1 billion-plus project that was set to be the group's showcase achievement.

Despite a work force of about 3,500 rushing to complete Wembley, Multiplex was unable to provide the FA with enough certainty that it would be ready on time, with Mr Roberts today blaming strong winds in February for some of the more recent delays on the trouble-plagued project.

The group has reaffirmed its guidance for the full financial year for a net profit of $50 million, excluding inter-group transactions.

Multiplex posted a profit of $148.1 million, excluding inter-group transactions, in 2004/05, under previous accounting standards.

The problems at Wembley caused a $376 million net loss in Multiplex's construction division in the first half, despite another 41 projects running to budget.

Multiplex's property development division's profit jumped to $29.6 million from $6.6 million previously and its funds management division nearly doubled to $24.3 million in the six months to December 31, 2005.

Multiplex declared an interim dividend of eight cents per stapled security, with no franking, down from 15.81 cents in the prior corresponding period."