Strip out exceptional items and engineering consultant Scott Wilson's performance held up well enough - adjusted operating profit remained flat year on year at £22.6m. Still, grim market conditions, and the UK government's sluggish attempts to bring forward infrastructure projects, have clouded the outlook.
The UK division, which generates about 70 per cent of sales, is heavily reliant on the private sector construction industry, which seized up in the second half. Moreover, government infrastructure projects have also endured a torrid year, even though road construction was one of the few bright spots. Specifically, the Highways Agency is continuing with projects such as the M1 upgrade and the A46 trunk road between Nottingham and Lincolnshire. However, deferred infrastructure projects in the health and education sectors had a knock-on effect for Scott Wilson, as government departments struggled to bring projects forward - for example, the construction and refurbishment of further education colleges has been halted after the education department realised it had spent its budget. The company also faced problems in the Middle East as Dubai's construction boom imploded, with management forced to set aside £2.7m of provisions against bad debts. Indeed, bad debts are generally up - from £800,000 last year to between £5m and £6m this time.
WH Ireland expects 2010 pre-tax profits of £17m, giving EPS of 15p (£20m and 17.8p, respectively, in 2009).
SCOTT WILSON (SWG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 72p | MARKET VALUE: | £52.6m | |
| TOUCH: | 71-72p | 12-MONTH HIGH: | 224p | LOW: 37p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 107p* | NET DEBT: | 23% | |
| Year to 3 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 172 | 4.30 | na | nil |
| 2006 | 198 | 19.3 | 38.2 | 2.5 |
| 2007 | 261 | 15.4 | 13.9 | 3.3 |
| 2008 | 324 | 19.7 | 17.7 | 3.6 |
| 2009 | 360 | 9.41 | 10.3 | 4.0 |
| % change | +11 | -52 | -42 | +11 |
Payment: 5 Oct *Includes intangible assets of £57.6m, or 79p a share | ||||
