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Mon September 28 2020

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Fit-out lifts ISG despite construction woes

9 Sep 14 ISG has reported a 19% rise in revenues and, despite difficulties with construction margins, a 27% growth in underlying pre-tax profit.

CEO David Lawther
CEO David Lawther

For the year ended 30 June 2014, ISG had revenues of £1,483m, up from £1,245m the year before.

Excluding the closure of a construction business in Kent, underlying profit before tax was £11.5m (2013: £9.1m).

The cash cow remains the core fit-out business. Its UK Fit Out & Engineering Services division made a £9.9m operating profit on £520m revenues and the UK Retail division made £6.0m on £283m revenue.

The UK construction business, by contrast, has been struggling. It made an operating loss of £1.2m during the year on revenues of £463m (2013: £499m). However, this business has been restructured into four regions and operations in Tonbridge have been closed. (See previous report here.

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During the year, a post-tax loss of £2.8m (2013: £0.4m) was incurred from the Tonbridge closure.  This resulted in a profit for the year of £2.4m (2013: £2.4m).

CEO David Lawther said: “The UK Construction market is now showing signs of improvement, both in the pipeline of opportunities and contract terms.  We have recruited new people into the leadership team and in our regions to grow and improve our skillsets with a focus on improvement in key areas including procurement processes, bid and risk management and winning-work strategy.”

He added: “We anticipate seeing an upturn in margins and a return to profit from 2015.”

Of the overall group results, which include improved turnover and profits from overseas operations, he said: "Our diversification strategy, combined with the recovery of our traditional UK markets, positions the company for continued growth.  Overseas, our businesses are benefiting from a growing reputation. We anticipate further improvement in our results in the coming year."

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