Office fit-out specialist ISG (ISG) confirmed its strong performance for the year to June, with underlying profits 27 per cent higher at £11.5m. ISG is benefiting from London's commercial property boom, as illustrated by its £125m contract to furnish UBS’s new UK headquarters - the largest of a string of deals that boosted the order book 18 per cent to above £1bn.
Revenue from its London fit-out business increased by nearly two-thirds to £270m. But ISG has also seen growth in foreign markets, having sought to internationalise its business during the recession. Chief executive David Lawther told us that strong demand from the Middle East and Asia was offsetting lack-lustre markets in France and Italy. The company has also been increasing its share of the European data center market, with revenues up from £30m to £250m in just two years. News of a £100m contract to fit out a fourth Nordic data center was unveiled alongside these results.
Only ISG’s UK construction business continued to struggle, with revenues down from £499m to £463m against a tough market backdrop. But the construction sector has now started to pick up - demand is finally spreading beyond the capital - and management expects the division to return to profit this year.
Brokerage Numis Securities expects pre-tax profits of £15.5m in the current financial year, giving EPS of 29.8p (up from £11.5m and 22.3p in 2013).
| ISG (ISG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 322p | MARKET VALUE: | £126m | |
| TOUCH: | 318-325p | 12-MONTH HIGH: | 334p | LOW: 201p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 145p* | NET CASH: | £46.3m | |
| Year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 0.97 | 8.8 | 21.3 | 14.34 |
| 2011 | 1.17 | 10.2 | 22.1 | 15.06 |
| 2012 | 1.28 | 1.2 | 3.1 | 9.00 |
| 2013 | 1.24 | 3.0 | 9.2 | 9.00 |
| 2014 | 1.48 | 6.8 | 13.5 | 9.45 |
| % change | +19 | +127 | +47 | +5 |
Ex-div: 23 Oct Payment: 9 Dec *Includes intangible assets of £87m, or 221p a share | ||||
