North Midland continues recovery… but Utilities woes remain

Nottinghamshire-based North Midland Construction has continued its recovery, despite ongoing problems in its Utilities division.

Revenue for the first half of the year increased by 20.8% to £129.58m and profits before tax reached £0.51m, up from £0.14m for the equivalent period last year.

Profits for the period for the civil engineering division, which operates mainly in the power sector, were £0.13m on increased revenues of £13.8m. This is on the back of it recently expanding into the waste to energy market which has generated some additional work with this sector offering promising future growth opportunities too. Recent contracts secured include a crop digester in Nottingham and a pumping station for the Doncaster Drainage Board.

The building division has had an “excellent” half year. Profitability increased by 73.4% to £0.25m with revenue up by 96.6% to £11.59m with projects currently on site at a number of different locations.

Similarly profitability in the Highways division has improved, with profits up from £0.17m to £0.22m, on an increased revenue of £20.04m. The recent expansion into the South West has been successful with already work secured there and around £13m of contracts confirmed for the remainder of the year.

The utilities division increased revenues by 16.8% to £15.47m, but suffered losses and the division is currently undergoing a major restructure.

The AMP6 programme for Severn Trent Water, the joint venture with Laing O’Rourke at Ambergate Reservoir in Derbyshire and the joint works with Barhale PLC on the Elan Valley Aqueduct which runs from mid Wales to Birmingham are well underway. As a result of these large projects, NMCNomenca has increased revenues by 18.2% to £49.59 million with operating profitability increasing by 91.7% to £1.38m. In addition the division has recently been awarded a £54.60m contract by BNM Alliance in a joint venture with Barhale for the Newark Sewer Strategy and secured contracts for the remainder of the year currently stand at £39.34m.

Despite an increase in the number of frameworks secured, the water industry’s transition from AMP5 to the AMP6 programme has resulted in a delay in orders. Consequently revenues for the Nomenca subsidiary declined by 20.3% to £19.06m and operating profitability by 7.0% to £0.2m. However order levels have improved recently and the secured workload for the remainder of the year is already £25.28m.

“We are delighted to show the improvement in these results which reflect the success of our strategy of expanding our client base by moving into new sectors and areas, as well as building on relationships with our existing customers which has led to additional work with them,” said chief executive John Homer.

“We would like to thank them for their continued support and also the considerable efforts of our people who have put in a lot of hard work . We look forward to building on this for the future success of the business, particularly as we approach the company’s seventieth anniversary which we will be celebrating with our staff later this year.”

He added: “It is really encouraging to see the strong order book for all the divisions so the future for the NM Group looks good.”