Trading conditions in the UK construction services sector continue to improve, as these results from Interior Services Group (ISG) show. Underlying pre-tax profits at the fit-out and engineering services group rose 29 per cent to £4.9m in the six months to 31 December, helped by a buoyant London office market. ISG is currently working on six major office fit-outs in the capital with a combined value in excess of £300m, besides keeping its leading position in UK retail fit-outs and data centre construction services.
Things aren't as rosy in the UK construction division, however, with regional property struggling in particular. Divisional revenues fell 17 per cent in the first half - though this partly reflected the strong comparator of the London 2012 Olympic Games in the prior period - while operating profits slumped to just £0.1m from £0.7m. David Lawther, ISG's chief executive, says the division "is starting to see an improvement in its pipeline" following the recent restructuring.
Dilutive acquisitions in Germany and a minority interest in Brazil meant underlying EPS only increased 7 per cent. Reassuringly, however, ISG's order book has increased by over a quarter to £968m. Broker Numis Securities forecasts adjusted pre-tax profits of £11.5m for the full year, giving adjusted EPS of 22.9p, rising to £14.7m and 29.3p in 2015.
INTERIOR SERVICES (ISG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 301p | MARKET VALUE: | £117m | |
| TOUCH: | 298-303p | 12-MONTH HIGH: | 323p | LOW: 128p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 46 | |
| NET ASSET VALUE: | 157p* | NET CASH: | £33.3m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 659 | 2.25 | 5.83 | 4.41 |
| 2013 | 708 | 2.39 | 4.44 | 4.54 |
| % change | +7 | +6 | -24 | +3 |
Ex-div: 12 Mar Payment: 1 May *Includes intangible assets of £88m, or 226p a share | ||||
