These decent half-year figures from construction and engineering services group May Gurney demonstrate that it's not all bad news for public sector outsourcers. Earnings were boosted by work repairing the damage done to roads from last winters big freeze, while a £1.5bn order book provides 75 per cent visibility for revenues into next year.
The public sector services division, which generates 62 per cent of group revenues, grew its cash profit 9.9 per cent in the period to £10m after winning highways maintenance and local council recycling contracts. While the regulated services division received a boost from the acquisition of Scottish gas and water contractor, Turriff - divisional revenues rose 42 per cent to £134.6m and cash profit grew 56 per cent to £5m. Moreover, the group cash profit margin remained stable at 4.3 per cent. Although the reported net cash position doesn't reflect the acquisition since the period ended of public sector car fleet management company, TransLinc - May Gurney now has net debt of £50.4m. Meanwhile, finance director Matt Stevens is to leave the company in April.
Peel Hunt expects adjusted pre-tax profit for 2012 of £28m, giving adjusted EPS of 29p (2011: £24.3m/24.8p).
MAY GURNEY INTEGRATED SERVICES (MAYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 295p | MARKET VALUE: | £207m | |
| TOUCH: | 288-295p | 12-MONTH HIGH: | 305p | LOW: 230p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 130p* | NET CASH: | £15.2m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 289 | 11.1 | 11.8 | 2.08 |
| 2011 | 351 | 13.1 | 14.3 | 2.79 |
| % change | +21 | +18 | +21 | +34 |
Ex-div: 7 Dec Payment: 6 Jan *Includes intangible assets of £52.3m, or 74p per share | ||||
