(NMD) North Midland Construction PLC

North Midland Construction PLC ("the Group")

18 November 2011

Interim Management Statement

The Group is today issuing its Interim Management Statement covering the period from 1 July 2011 to 30 September 2011, as required by the UK Listing Authority's Disclosure and Transparency Rules.

The deterioration in the economic climate is having a significant adverse effect on certain sectors of the Group's business.  As a result, the Group has delivered a loss of £0.3 million for the quarter, on a revenue of £38.7 million and we do not anticipate a significant improvement in the trend rate of underlying trading performance during the final quarter.  This is primarily due to continuing losses within the Building subsidiary, which is currently undergoing radical restructuring.

The Building subsidiary is still experiencing delays and cost-overruns on the major project referred to in previous trading statements. A contractual claim for recovery of losses is currently being pursued.

Nomenca Limited is delivering in line with expectation, as a result of robust expenditure by the water companies, and the year end result will be in excess of that for 2010.

The Highways division continues to perform strongly and both revenue and profit will exceed the previous year.

The Civil Engineering division, including the NMCNomenca sub-division engaged on the Severn Trent Water AMP5 programme, has returned a similar profit on reduced revenue over the comparable period last year.  The division's water business is performing strongly, but tender opportunities outside the water industry remain scarce.  However, the division is hopeful of significant orders in the near future.

The loss of the Virgin Media Term Contract has impacted on the Utilities division in the short term.  Replacement frameworks have now been secured, but did not commence within the period.  Both profit and revenue declined in the quarter compared with the previous year.

Cash flow has remained constant and the overall position has improved marginally over the previous year.  The Group continues to operate well within its facilities.  The Group was partially successful in its appeal for legal costs incurred during the OFT investigation and has been awarded over £50,000 in compensation.

Due to the poor performance of the Building subsidiary, the Board has again reviewed the value of goodwill currently incorporated within the accounts at a carrying value of £1.267 million, and has determined to provide in full against this amount.  This one-off non cash accounting adjustment cancels out the exceptional profit of £1.25 million recognised in the first half of the financial year as a result of the reduction in the OFT fine.

The current Group order book for 2012 stands at £70 million, compared with £89 million at the same time last year, reflecting the challenging trading environment, particularly for our Building subsidiary.

Contacts:-

NORTH MIDLAND CONSTRUCTION PLC

UNAUDITED CONDENSED GROUP HALF YEARLY FINANCIAL STATEMENTS

25 August 2011

North Midland Construction PLC ("the Company") the UK provider of civil engineering, building, mechanical and electrical services to public and private organisations, announces interim results for the six months ended 30 June 2011.

Highlights from the results and the Chairman's Statement:-

·              Revenue increased by 17.2% compared with previous year.

·              Significant loss in North Midland Building Limited.

·              All other divisions are profitable.

·              The reduction in fine by the Office of Fair Trading (£1,203,000) has been taken to operating profit as an exceptional item and is not subject to taxation.

·              Interim dividend maintained at 2.50p.

CHAIRMAN'S STATEMENT

The result for the half-year is a disappointment with profit before tax reduced by 35.6% to £1.31 million on a revenue increased by 17.2% at £91.30 million over the comparable period last year.  This reversal is due to a loss generated within North Midland Building Limited of £1.94 million.  The Nomenca subsidiary and all the other divisions traded profitably during the period.  An exceptional item profit of £1.20 million is included in the result.  This has emanated from the successful appeal to and subsequent reduction in the OFT fine.

The Building subsidiary has delivered a significant loss of £1.94 million on revenue reduced by 3% at £11 million.  Its major contract is in serious delay and will result in a claim for losses incurred.  Unforeseen operational problems on two further contracts have resulted in losses of £0.91 million.  Both projects have now been completed.  In accordance with best practice the predicted outturn losses on these three contracts have been incorporated into the half-year result.  Market conditions remain extremely difficult with very competitive margins.  The workload for the remainder of the year currently is £7 million.  Reorganisation of the subsidiary is currently underway and this will result in significant overhead reduction and improved performance.

Conversely, Nomenca Limited, the Mechanical & Electrical subsidiary, has benefited from the escalation in expenditure of the water companies under the AMP5 programme.  Revenue has increased by 63.0% to £29.31 million.  Profitability, also, increased by 95.7% to £0.46 million.  The forecast for this year will be achieved and prospects for the ensuing years are encouraging.  Current workload for the second half of the year stands at £27 million.

Revenue within the Civil Engineering division remained static at £22.9 million, with profitability declining by 4.1% to £0.76 million.  Both the Civil Engineering division and Nomenca Limited are beneficiaries of the performance of NMC/Nomenca, the sub division formed to deliver the AMP5 programme for Severn Trent Water.  NMC/Nomenca performed well and will deliver its forecast for the full year.

In spite of the public sector expenditure cuts, the Highways division increased both revenue and profit by 21.7% and 78.7% respectively.  Geographical consolidation has continued and the division has a strong presence with several public sector frameworks.  Year end forecasts will be achieved and the current workload for the second half of the year is £10 million.

Revenue in the Utilities Division increased by 5.5% to £20.3 million, but profit declined by 33.7% to £0.60 million due to margin pressure on the existing frameworks.  Price increases in both materials and more significantly fuel have been considerable and are non-recoverable on these contracts.

Virgin Media have reviewed their supply chain arrangements and the division was unsuccessful in securing the revised contract.  Replacement frameworks are actively being pursued and with the major South Yorkshire Digital Region contract finishing within this financial year, replacement revenue is a priority.

There was a net cash outflow during the period, particularly due to high levels of work in progress within the Utilities division.  However, a positive cash balance was maintained at the end of the period.

As the exceptional item is not subject to tax, it is the Board's intention to maintain the return to shareholders.  The payment of an interim dividend of 2.5p per share, which will be paid on 30 September 2011 to the shareholders on the register on 9 September 2011, is recommended by the Board.

Robert Moyle

Chairman

North Midland Construction PLC

UNAUDITED CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME

The unaudited condensed Group results for the half year ended 30 June 2011 are shown below together with the unaudited Group results for the half year ended 30 June 2010 and the audited Group results for the year ended 31 December 2010.

UNAUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

UNAUDITED CONDENSED GROUP BALANCE SHEET

The unaudited condensed Group Balance Sheets at 30 June 2011 and 30 June 2010 are shown below together with the audited Group Balance Sheet at 31 December 2010.

UNAUDITED CONDENSED GROUP STATEMENT OF CASH FLOW

The unaudited condensed Group statement of cash flows for the periods ended at 30 June 2011 and 30 June 2010 are shown below together with the audited Group statement of cash flow for the year ended 31 December 2010.