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ISG trading 'ahead of expectations'

1 Jul 10 Construction and fit-out specialist ISG has reported a strong finish to the financial year ending 30 June 2010 in its UK businesses, though it performed less well abroad.

Construction and fit-out specialist ISG has reported a strong finish to the financial year ending 30 June 2010 in its UK businesses, though it performed less well abroad.

A statement from the firm, which saw profit fall 61% in its last interim results, said: “Our UK businesses have performed strongly ahead of expectations and this has offset a delay in the expected pick up in international markets.”

Its current order book stands at circa £740m (June 2009: £822m), of which £680m (June 2009: £686m) relates to the financial year ending 30 June 2011.

ISG's said it expected to finish the year with cash of £28m, down from £32m at the end of the last half-year period.

The firm reported “some recovery” in London fit-out, “but with a highly competitive market place margins were under pressure”.

Its retail business, through its focus on financial and food retail, has maintained revenues in-line with prior year, with margins improving in the second half of the year, ISG said. The UK construction business performed “strongly” with increased margins, despite lower revenues.

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Overseas operations remained a challenge, the firm said: “Delay to the start of projects by our multinational clients continued to be a feature in our overseas operations, however we saw a marked improvement in activity in the last quarter.

“Unlike our other overseas operations the Japanese market has shown no sign of recovery in the investment plans of our multinational clients and as a result we have decided to discontinue our operations in Japan at a total loss for the year of £0.8m.”

The statement concluded: “In a challenging market, the Group's diversification strategy continues to position itself towards more resilient regions and sectors. ISG's activity is currently split 70% private sector and 30% public sector.

“We will continue to pursue growth opportunities both organically and by acquisition in our three principal markets of Fit Out, Retail and UK Construction.”

ISG's preliminary results will be announced on 8 September 2010.

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