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Fri June 18 2021

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ISG weathers challenging year

17 May Privately-owned construction contractor ISG saw revenue and profit take a beating in 2020 but it remained debt free and ended the year with an enhanced order book.

Chief executive Paul Cossell
Chief executive Paul Cossell

ISG’s revenue for 2020 was down 23% to £2.0bn (2019: £2.6bn). Pre-tax profit was down 80% to £8.9m (2019: £44.2m).

It ended the year with £101.5m net cash (2019: £116.9m 2019) and a forward order book of £1.5bn(2019: £1.4bn).

Underlying EBITDA for the year was £37.6m (2019: £63.3m 2019).

Chief executive Paul Cossell said: “In one of the most challenging years for our industry, clients and society in general, our resilient 2020 financial performance is testament to the outstanding contribution and commitment of our people and supply chain partners to drive projects forward safely.

“Four years of consistent profitability and growth provided the financial and structural resilience to weather an unprecedented period of market uncertainty and emerge with a record forward order book, which resets us on our previous growth trajectory. I’m passionate that ISG continues to be at the forefront of creating many of the world’s most innovative and advanced buildings that have a profound and positive impact on our environment, communities and helping to transform lives.”

£m ISG Group Fit Out Construction Engineering Services
Underlying Revenue 2020 2,026.40 1,042.30 690.8 293.3
Underlying Revenue 2019 2,584.10 1,223.20 562.2 798.7
Underlying EBITDA 2020 37.6 28.9 1.9 6.8
Underlying EBITDA 2019 63.3 30.9 4.7 27.7
Forward order book 31/12/20 1,510.80 699.5 498.9 312.4
Forward order book 31/12/19019 1,399.60 429.2 786.2 184.2

Finance director Karen Booth said: “Highlights from the group’s cashflow for the year include net cashflow from operating activities of £1.5m. With operating profit before interest and tax, but after depreciation and amortisation, of £9.8m, demonstrates we have been able to utilise our working capital in this challenging year in continued support of our supply chain.”

She added: “As a signatory to the Prompt Payment Code in the UK, we are proud that we pay 96% of all invoices within 60 days, which is higher than the Code’s requirements. Our average payment days is much less at 30 days.”

Talking specifically about ISG's construction business outlook, she said: "2021 will be all about consolidating and building on the successes of 2020. Key projects will complete this year, such as the redevelopment of the Compton and Edrich Stands at Lord’s Cricket Ground and our global retailer client’s new European headquarters, and work will continue on the £89m Interchange project in Cardiff for Rightacres, along with multiple schemes for Alliance Leisure and Fusion Students. The business will continue to target increased revenue streams from frameworks and key strategic clients. In addition, it will start to focus more on larger projects, investing in new sectors through frameworks including defence, as well as those growth sectors where the business already has a strong track record, such as education and justice. A shift towards MMC [modern methods of construction] and development of our Design for Manufacture and Assembly (DfMA) offer will also be an area of focus for 2021."

ISG is owned by Cathexis, the investment vehicle of Texan billionaire William Harrison, which took it over for £85m in 2016 and de-listed it from the London Stock Exchange.

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