Pochin’s profits slump as developer feels the pain

DEVELOPER Pochin’s interim results show a 72% fall in profit, in what its chairman called “painful circumstances”.

Pre-tax profit for the Middlewich-based group fell to £574,000 in the six months to the end of November 2008, from £2.09m in 2007. Turnover was £49.9m, compared with £54.4m. Property write downs totalled £2.4m.

Pochin’s chairman Richard Fildes said that across the group, deteriorating conditions were quickly reacted to with cost reduction and cash conservation.

There was an increase in net cash during the period of £5.7m and Mr Fildes said the group’s banking facilities have been recently renewed.  

He said the construction division has performed “creditably” under adverse trading conditions, following a restructuring. He added that this has contributed to improved margins which, combined with the benefits of cost savings in overheads, have led to an improved result, albeit from reduced turnover.

He also admitted that the residential division has been badly affected by the collapse in the housing market.

“The division’s objective is now to realise the group’s investment in residential property in a controlled manner, and similarly to dispose of its interest in sites with the benefits of planning permission as opportunities allow. Fortunately, the exposure to the housing market is relatively modest in the context of the group as a whole,” he said.

He added that the concrete pumping division has also had a difficult half year, with weakening demand exacerbated by higher fuel prices.

“Whilst falling oil prices have now brought some welcome relief, demand for concrete pumping remains subdued, particularly in the private sector,” he said, adding that it has won business relating to the infrastructure works for Olympic Games projects.

The interim dividend was half that of last year at 1.5p.

Shares remained unchanged at 80p, following the announcement.