A new managing director has been appointed to steer Shepherd Engineering Services Ltd (SES) of York out of troubled times.

He is Allan McDougall, a former managing director of the ill-fated UK division of building services firm MF Kent Services Limited.

Mr McDougall succeeds Leslie Francis, who on February 2 resigned as managing director of SES after a little more than three years in the post.

SES, owned by Shepherd Construction, played a big role as engineering sub-contractor in a Ministry of Defence project which triggered millions of pounds of losses for the privately owned company.

The project, for the MoD's Defence Evaluation and Research Agency in Farnborough, was undertaken by Shepherd Design and Build. SES became the main engineering sub-contractor for the entire contract after joint project contractors Hayden Young pulled out.

Its price rose by more than £25 million to £100 million after design changes wanted by the MoD, but Shepherd reportedly received payments of only £12 million to cover.

Despite the setback, pre-tax profits for the Shepherd Building Group as a whole increased by £100,000 to £4.1 million for the year to June 30, 1997.

But the latest separate accounts filed for SES - over 18 months to the end of December, 1997 - show thumping losses with the net worth of the company nearly halving and its long-term liabilities increasing over the period by more than 200 per cent.

Turnover dropped by 30 per cent to £47.745 million and in the 78-week accounting period, under the pre-tax profits column, losses ballooned 36 per cent from -£5.987 million to -£8.198 million. Net worth of the company - that is, its surplus - dwindled by £1.278 million to £1.354 million.

At his Georgian-style home in a secluded part of the village of Newton-on- Ouse, Mr Francis said he had left the company "by mutual agreement," adding: "I would prefer not to say more than that."

But Mr Francis, who begins a new job on June 1 with FG Skerritt, mechanical and electrical services in Nottinghamshire, defended the job that SES had completed for the MoD last May, saying: "It was technically brilliant and the client was more than satisfied."

SES' owner, Shepherd Construction - also under the Shepherd Building Group umbrella - suffered its own operating losses over the year to June 30, 1997 almost doubling from £1.69 million the previous year to £2.9 million in the aftermath of the MoD contract and a costly re-organisation.

Shepherd Construction's managing director David Anderson said: "The results reflected a write-down on Farnborough, an account which has now been agreed and paid: the full write-down of heavy Public Finance Initiative development costs, and the costs of establishing the business in the south."

Mr McDougall's UK division of building services firm MF Kent Services Limited closed along with the company's European operations, although it maintains offices in Ireland, the Far East and South Africa.

He was southern regional director for mechanical and electrical firm Balfour Kilpatrick Limited and was previously chief executive of Kares Project Management.

As chairman of the Contractors' Liaison Group, he assisted with the Latham report into fairer contrac

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