THE Australian construction company behind the new Wembley football stadium posted lower-than-expected annual profits yesterday as it counted the cost of problems on the flagship project.

In a statement, Multiplex blamed the change in steel contractor - which was originally Darlington-based Cleveland Bridge - for some of its losses.

It said the litigation and higher costs it incurred were among problems to affect the stadium project, which is worth about $1.2bn dollars (£500.3m) to the company.

The two companies are locked in a legal dispute after Cleveland Bridge left the project last year.

Each firm claims the other owes it money and the full case is due to be heard early next year.

A spokesperson for Cleveland Bridge said its position with Multiplex caused people to look more closely at Multiplex's financial position, but was not the ultimate cause for its major losses.

Multiplex yesterday said its construction division revealed a full-year deficit of $62m Australian dollars (£26.1m), compared with profits of $73.2m (£30.8m) last year.

The stadium scheme has been hit by delays and cost-overruns, although Multiplex insisted it was on track to hand over the stadium by the end of March in time for next May's FA Cup Final.

The FA has provisionally booked Cardiff's Millennium Stadium in case Wembley was not completed.

But Multiplex's chief executive said there was nothing to worry about.

Andrew Roberts said: "There has been some Press that the FA has booked, on a contingent basis, Cardiff Millennium Stadium. I suppose that's understandable if you are the FA. But their expectation, as well as ours, is that the FA Cup will be held at Wembley in May 2006."

It added yesterday that it had set aside a further $8.6m (£3.6m) as a contingency against risks that remain until the completion of the stadium, which will hold 90,000 spectators as the updated home of the England football team.

Overall, Multiplex made profits of $148.1m (£62.4m).

Mr Roberts said: "The result is very disappointing and has been significantly impacted by the substantial losses experienced at Wembley National Stadium.

"It is unfortunate that the Wembley performance undermined the strong contribution from other parts of the group."