“Swift action” to reduce costs as profits halve at Servelec

SERVELEC, the Sheffield-based technology group, has announced that pre-tax profits have more than halved following profit warnings made earlier this year.

Revenue for the six months to June 2016 dropped to £28.4m from £30.0m in the same period last year.

Pre-tax profits before continuing operations more than halved, from £4.8m to £1.7m.

Chief executive officer Alan Stubbs said events which led to the profit warning were “issues of timing” and that the board was confident in the longer term about Servelec’s prospects.

The company also acquired two businesses this year, Synergy and Abacus, which the chief executive said would “substantially strengthen” its care divisions.

Mr Stubbs said: “The Board is positive about the long term prospects for Servelec Group.

“Swift action has been taken to strengthen our sales team and reduce implementation resources in Healthcare and to reallocate resources across Controls and Technologies whilst maintaining our ongoing focus on reducing costs.

“Coupled with recent contract wins we are confident in achieving the revised market expectations for the year. Large contract wins in H2, which will be executed during 2016, 2017 and beyond together with a growing pipeline of opportunities mean that we are on track to return to growth in 2017.”