23 April 2007
Alfred McAlpine has announced the resignation of its finance director, Dominic Lavelle, following the "deliberate and systematic" fraud at its Slate subsidiary. The Slate managing director and operations director have also been subject to disciplinary procedures.
A major restructuring is now underway, which includes the closure of one quarry and 166 job cuts.
On 26 February, McAlpine announced that an investigation by its internal audit team had uncovered a systematic misrepresentation of production volumes and sales for a number of years by a large group of senior managers at Slate.
Following the discovery, an independent forensic investigation confirmed that the pre-selling of slate at vastly reduced prices and overstatement volume and sales resulted in a total sales and profit impact of £22.9 million. The investigation concluded that personal gain was not the underlying motivation for the fraud, although group chief executive Ian Grice, could not confirm what was. North Wales police are now investigating the case.
"The extent of the fraud and cover up within Slate has been a shock to us all and is most disappointing, but we have responded quickly and decisively. Our immediate priority for Slate is to return this business to profitability," said Grice. He would not say whether or not McAlpine would ultimately seek to sell the subsidiary, although he added that it was "not part of our core business".
Slate from the business is said to cover the roofs of the British Library, Buckingham Palace and the Welsh Assembly.
Announcing its interim results today, the group reported revenues up 5 per cent to £1,123 million, with each of its three core businesses delivering "strong performances" in 2006. It has secured three major new FM contracts, including its largest ever with Mapeley for the Inland Revenue, worth £800 million over its 15 year term.
Profits fell in 2006 to £17.6m from £27.6m the previous year.