Technology business returns to profit
A Sheffield technology firm has returned to profit for the first half of this year; just over 12 months on from issuing a profit warning and seeing a shares slump.
Servelec Group reports a return to growth in revenue and profit in the first half of the year to June 2017. In a report issued this morning, it said cash conversion had returned to anticipated levels and that the group is aiming to be debt free by the year-end as it considers providing for an outstanding £2.6m from 2015.
The firm also has seen a deferment of orders in some areas of the automation business, which will reduce the anticipated growth for the full year.
Alan Stubbs, chief executive officer, said they were pleased with the progress made in the first half of 2017, particularly in Servelec HSC and Servelec Controls Oil & Gas and this progression is expected to continue.
He added: “The board has carried out a thorough review of the Combined Heat & Power project in Turkey, including the previously advised debt position. We are concerned at the lack of progress that has been made by the customer in resolving their funding arrangements and the £2.6m related debt from 2015 remains unpaid. If the board considers there is still no demonstrable improvement in progress by the customer at the year-end, the debt will be fully provided for.
“Servelec HSC and Servelec Controls Oil & Gas are trading well and whilst the deferment of customer spend in Servelec Technologies is disappointing, we have market leading products in Servelec Technologies and its global business is developing. The board remains positive about the longer term prospects for the group.”
Earlier this year, Stubbs said the company had undergone a “full forensic review” of the business, which included changes to its senior management and sales teams. He said he expected a stronger 2017 given these changes and the positive impact of recently acquired businesses..
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