Join our community of smart investors

Fulcrum potential grows

Fulcrum Utility Services has turned profitable, and its shares look good value
May 31, 2012

Fulcrum Utility Services’ transformation since it was bought out from National Grid in 2010 is bearing fruit after the gas connections specialist turned profitable in the second half of the year to end March, setting itself up nicely for a maiden profit in the current financial year.

IC TIP: Buy at 18.5p

In the latest 12-month trading period, revenues rose by 14 per cent to £41m and gross margins improved sharply which helped the company post cash profits of £1.1m in the final quarter. A much reduced cost base and a relaunched corporate brand have helped boost performance and expect further improvements to come as Fulcrum has now completed some low-margin legacy contracts, finalised renegotiations with key customers and formed three framework agreements with Carillion, McNicholas and Turriff.

The company has a strong heritage in providing utility infrastructure including projects of scale such as the Olympic Park and Westfield shopping centre in Stratford. The business is also focusing on diversifying from gas connections to multi-utility opportunities, where £1m worth of new contracts have been won since January.