Commenting on current trading conditions, he said that Cyril Sweett (now being rebranded as just Sweett) was cutting costs and laying off staff in UK and Middle East offices
Competitive pressures have continued to impact margins negatively in the UK, Mr Henderson says. “While the first quarter of the financial year tends to be subdued, this trend has continued into the second quarter.”
Mr Henderson tells shareholders: "Trading conditions have been tough in the year to date. In Asia Pacific we have continued to perform strongly as the group has delivered growth in China and commenced operations in both Vietnam and Thailand. Given the continued strong performance from our Asia Pacific operations, we will continue to invest in the region in the second half.
“Our UK PPP Management and Investment vehicle has also performed well and we sold our holding in the South Ayrshire Schools PFI project in the first quarter.
“In the Middle East, the Arab Spring has caused a number of projects to be cancelled. As a result, we now anticipate lower levels of client investment going forward than we had previously expected.
“In view of lower operating margins, we are taking action to reduce our UK and Middle East direct costs and administrative functions so that we can service the business with a more appropriate cost base. The costs of this restructuring will be recognised in the first half year as an exceptional item.”
With the level of bidding activity across the group now starting to improve, the order book has grown by £5m since the last year-end to £83.4m.
“Although we anticipate an improved performance in the second half, as a result of these trends, the full year results are likely to be lower than previously expected."