It's been a horrid year for property fit-out group Interior Services, which has seen underlying pre-tax profits plunge 40 per cent to £7.5m, despite some success tapping into new markets.
Torrid conditions in the UK were at the heart of the problems. Among other things, the group has been hit by supermarkets reigning in their expansion plans, the slowdown in public sector spending and a drop-off in large projects. While some progress has been made winning work in new growth areas such as data centres and high-end residential properties, margins and cash flows came under serious pressure. So to address the problem, Interior Services is attempting to cut costs, which meant restructuring efforts took a £3m slice off profits. The company also booked a £2.1m loss exiting affordable housing activities in the South West.
Still, the international operations fared much better. In the six-month period, overseas revenues increased 27 per cent to £203m, profits quadrupled to £3.5m and growth prospects look promising.
Broker Numis expects current year pre-tax profits of £9m and EPS of 20.8p (from £7.5m and 18p in 2012).
| Interior Services (ISG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 124p | MARKET VALUE: | £41m | |
| TOUCH: | 122-126p | 12-MONTH HIGH: | 185p | LOW: 107p |
| DIVIDEND YIELD: | 7.3% | PE RATIO: | 51 | |
| NET ASSET VALUE: | 153p* | NET CASH: | £25.4m | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.09 | 12.6 | 36.4 | 13.2 |
| 2009 | 1.05 | 11.8 | 30.1 | 13.7 |
| 2010 | 0.97 | 8.8 | 21.3 | 14.3 |
| 2011 | 1.17 | 10.2 | 22.1 | 15.1 |
| 2012 | 1.28 | 3.0 | 2.4 | 9.0 |
| % change | +9 | -71 | -89 | -40 |
Ex-div:24 Oct Payment:11 Dec *Includes intangible assets of £91.5m, or 274p a share | ||||
