Construction firm upgrades results forecast on back of major contract wins

North Midland Construction has upgraded its results forecast for the year, anticipating revenue between £340-£345m as it said strong trading has continued into the second half of the year.

In January, the company announced that the order book for 2018 stood at around £257m, just under 80% of the directors’ revenue expectations for the current year, with targeted net margins of between 1.5 and 2% cent for the current year.”

North Midland said this morning: “The directors are now confident that revenue for the current year will exceed these full year expectations and anticipate revenue being circa £340 – £345m, with net margins within the anticipated range previously set out above, but more specifically  between 1.7 – 1.8%.”

The company has been boosted by further project and framework wins, including a £55.5m design and build scheme at Bellozanne Sewage Treatment Works for the Department for Infrastructure of the State of Jersey under a joint venture agreement with Doosan Enpure, and the £225m Civil Engineering K7 Capital Works Framework Contract for South West Water.

North Midland said its order book for delivery in 2019 now stands at £222m (Oct 2017, for 2018: £202m) and these new contracts are anticipated to provide additional revenue of around £40m a year when fully underway for their duration of around four to five years.

John Homer, chief executive of North Midland Construction, said: “We are delighted that the significant improvement that we reported in August has continued, as we had expected, into the second half of our financial year.  The outlook for our future trading remains buoyant. The benefit of these significant contract wins will continue to feed quality work into the forward order book.
“Our focus on cash management is performing well and providing positive cash flows for investment opportunities.

“Our people and our culture will remain our overarching differentiator for further success. We will continue to invest and drive progress in this area.”