Construction consultancy returns to half year profit

LANCASHIRE-based construction consultancy Driver Group has said its half year results will show a profit, but outstanding debts in Africa, the Middle east and Asia will push its final  results into loss.

In a trading update for the second half of the year, the listed Haslingden company said it was not only back in profit but that turnover for the second half is expected to be 7% ahead of the first half of its financial year.

It said that considerable progress has been made in reducing the cost base across the group, driving efficiencies and improving job profitability.

A detailed review of the group’s operations, which was started on the appointment of Gordon Wilkinson as chief executive in March is ongoing, it added.

Revenue and operating profit in Europe & Americas are above expectations and at record levels for the period, whilst revenues in Africa, Middle East and Asia (AMEA) are broadly in line with expectations and again at record levels.

However, operating profits in the AMEA region are well behind the company’s internal forecasts and it has increased provision against outstanding debts in the AMEA region by £520,000.

This has meant that despite the strong second half performance, the group will still  record a “modest” operating loss before exceptional items for the full year tot he end of September.

“Further steps are still required to bolster and improve the sustainable profitability of the Group. Nonetheless, the board is confident of delivering further progress in the 2017 financial year,” it said in a stock market statement.

Last year, revenue hit £48m for the year ended September 30 but it suffered an operating loss before tax of £1.9m after exceptional costs relating to severance payments of £500,000 and acquisition and integration costs of £1.6m, share based payment charge of £500,000 and amortisation of intangible assets of £200,000.