Newspaper article The Evening Standard (London, England)

McAlpine Mauled after [Pounds Sterling]13m 'Fraud' Costs Alert

Newspaper article The Evening Standard (London, England)

McAlpine Mauled after [Pounds Sterling]13m 'Fraud' Costs Alert

Article excerpt


ALFRED MCALPINE today plunged 6312p to 550p after the company warned it had uncovered what looks like fraud going back several years by senior managers at its famous Welsh slate division that will wipe almost a third off this year's profits.

In a bluntly worded statement to the market, the support services group said profits are likely to be [pounds sterling]13 million lower than previously thought. The problems all relate to the slate subsidiary which has recently supplied high-profile buildings including the Welsh Assembly and the new British Library with roofing materials.

Today's statement says the group's internal audit team has uncovered a "systematic misrepresentation of production volumes and sales for a number of years". It also allegethe managers involved tried to conceal the financial impact of their actions by forward selling slate at heavily-discounted prices and that this behaviour and collusion "has been entirely deliberate and involves the possibility of fraud".

Brokers had expected the division, which McAlpine has owned for about 40 years, to produce about [pounds sterling]5 million of a total of [pounds sterling]43 million of profit.

Altium Securities was the first broker to slash its recommendation from reduce to sell and more are likely to follow. Two managers have been suspended and independent accountants are being sought to launch a full investigation.

In London, rising oil and commodity prices underpinned support for miners and the big oil producers, helping the FTSE 100 index rise 17.3 to 6418.8.

Xstrata, 33p higher at 2678p, was additionally boosted by favourable words from analysts at HSBC. The broker raised its target to 2900p from 2750p following a revision of thermal coal price forecasts. It is predicting a rise due to supply side bottlenecks and an increase in the global cost curve. It has repeated its overweight rating and thinks coal prices should benefit BHP Billiton, 7p better at 11412p, Rio Tinto, 25p ahead at 2932p and Anglo American, 22p up at 2630p. …

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