- Europe and Americas report strong operational performance.
- Middle East and Asia divisions primed to return to profit following cost-cutting and restructuring.
- Order delays likely to start unwinding from fourth quarter of 2021.
- Significant profit recovery expected in 2021/22.
- Payment of half-year dividend highlights confidence in medium-term trading prospects.
It always pays to understand the operational leverage of a business, and identify likely catalysts for profits to ratchet up when sales cycles improve. This is highly relevant to Driver (DRV:50p), a consultancy group that provides clients in the construction and engineering sectors with specialist commercial management, planning, project management, and dispute resolution services.
Driver’s businesses in the UK, Europe and Americas have been benefiting from new offices (Spain and US), increased headcount (up from 212 to 228 staff), reorganisation of the France operation, and ongoing expert witness work undertaken by its high-margin Diales subsidiary in the UK. In fact, divisional operating profit surged 47 per cent to £2.53m on 12 per cent higher revenue of £17.2m in the first half to 31 March 2021, a reflection of both the operational gearing and strategic move to target a greater proportion of higher-margin work.