ISG merges food and banking fit-out operations

Grant Prior 10 years ago
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ISG has merged its retail banking and food fit-out operations as part of a cost-cutting drive in the face of an increasingly competitive market.

The move has led to restructuring costs of £3m as ISG also completed the reorganisation of its construction business in the south west and discontinued affordable housing work in the region.

The cost-cutting drive was confirmed in ISG’s annual results today which saw group revenue up to £1,281m for the year to June 30 2012 from £1,174 last time as pre-tax profit fell to £3m from £10.2m.

Fit-out work continued to see smaller refurbishment projects coming forward rather than large-scale new schemes and food clients are “reviewing their approach to frameworks and focusing on maximising value at every stage.”

Profit margins in the food sector halved during the period.

Construction was one of the main drivers of turnover growth despite “operating in a particularly challenging section of the market and as such it continues to experience competitive pressure on margins.”

Construction revenue during the year rose to £533m from £455m driven by work in London and on the Olympic site.

Chief executive officer David Lawther said the market will remain “challenging”.

He added:  “The Group is well placed to benefit from a recovery in the UK and from our presence in key global locations that are attracting inward investment.

“We are confident of our strategy and will continue to target growth both organically and via acquisition.”

Figures for the year show that profit margins in the UK fit-out market fell to 1.9% from 2.3% last time while construction dropped to 0.2% from 0.8%.

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