Enterprise optimism fuelled by £2bn in contract wins
UTILITY and public sector services group Enterprise has revealed strong financial results for 2009 and believes it is well placed for further growth, despite looming cuts in public spending.
A clutch of new contract wins during 2009 – worth more than £2bn – have lifted the group’s order book to £5.9bn.
The Lancashire company, 70% owned by 3i, saw operating profits rose 4% in the
year to December 31 2009 to £77m. Turnover was down slightly at £1.06bn from £1.09bn in 2008.
Enterprise carries out a wide range of services, from emptying residential dustbins to maintaining roads and repair work on the London Underground.
It also manages, maintains and repairs government-owned properties. Including its joint venture partners the Leyland-based company employs 13,000 people and serves 15 million people.
As well as continued growth in both its core business sectors, utilites and the public sector, Enterprise said it sees an opportunity in power. To this end it bought Bolton-based Bethell Power Services for £19.8m last year.
In their report, accompanying the annual accounts, chief executive Neil Kirkby and chairman Alan Fletcher said they expect the company to benefit from the looming cuts in spending.
“The group is now very well prepared for further substantial growth in revenue,cash flow and profits…
“The markets in which Enterprise operates are expected to grow substantially. Pressure on public finances is expected to force a material uplift in the outsourcing of long-term integrated service activity to achieve improved levels of efficiency.”
Mr Kirkby – who replaced long-standing CEO Owen McLaughlin last autumn – added: “The energy market offers further opportunities as consumption requirements increase, alternative energy services are developed and as management programmes are developed to reduce carbon emissions.”
Despite standing dowm as chief executive Mr McLaughlin remains on the board and is actively involved in the business.
New contracts won during the period include: £300m over five years from the Highways Agency; £250m over five years from United Utilities Water and £250m over five years from National Grid Gas Alliance.
On the downside the group’s telecoms business lost a key contract with BT to maintain its fixed-line network.
Net debt fell from £828m in 2008 to £737m, after a reorganisation of the group’s share structure at the year end.
This saw 50% of shareholder loan notes and 50% of the preference shares into a new class of ordinary shares. In 2009 Enterprise saw its interest payments fall from £45.5m to £32.5m, reflecting lower interest rates.
