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Sat August 18 2018

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North Midland doubles half-year profits

9 Aug North Midland Construction has posted half-year results showing 19% revenue growth and profits twice last year’s level.

Chairman Robert Moyle
Chairman Robert Moyle

For the six months to 30th June 2018 North Midland Construction made a pre-tax profit of £2.51m (2017 H1: £1.23m) on revenue of £160.9m (2017 H1: £135.1m).

A £1.6m loss in the telecoms division dragged the Built Environment segment of the business into an operating loss of £200,000 on revenues down 3.4% to £48.8m.

The Construction segment produced an operating profit of £1.22m on revenues almost doubled to £21.98m, up from £11.2m last time.

There was also revenue and margin growth in both Highways and Water.

However North Midland Construction suffered a reverse last month in the Court of Appeal in its long-running contractual dispute with Cyden Homes. “The appeal was heard on the 12 July 2018 but unfortunately the outcome was unfavourable for the company,” chairman Robert Moyle said. “As a consequence, alternative strategies for making appropriate recovery under this contract which had already been designed in parallel are now being fully implemented. The financial impact of this decision had already been recognised in our 2017 accounts and will not affect current projections.”

The company had £18.9m cash in the bank at 30th June 2018, up from £7.9m a year before and £320m of orders to be completed this year.

Chief executive John Homer said: "These results demonstrate the continued progress made in the business against our strategic objectives. Our focus on margin enhancement (104% ahead of last year) and cash generation (138% ahead of last year) is beginning to show returns and is anticipated to continue going forward.

“We continue to invest significantly in the development of our people and the evolution of our employer brand. It is our firm belief that our people are the overarching differentiator in the service that we provide and the primary driver for our continued success.

“The outlook for future trading remains positive and provides the opportunity to maximise earnings from our operations. The board is anticipating further revenue growth coupled with an enhanced margin percentage."

MPU

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