ISG construction arm edges back into profit

Aaron Morby 11 years ago

Interior Services Group has streamlined its eastern construction division and brought retail work under a single management team.

The firm said it continued to adapt to a challenging market, and said it was was hopeful of improvement on both the fit-out and construction side from an improved order book.

Announcing results for the first half of the year, ISG said group pre-tax profits remained flat at £2.2m on turnover up 6% to £657m.

Its construction arm continued to struggle to deliver healthy profits making just £700,000 from £280m turnover.

David Lawther, chief executive officer, said: “The market remains competitive and we have seen particularly tough trading conditions in our East region where we are in the process of a reorganisation to reflect current market conditions.”

He added that the London office fit-out market remained fiercely competitive, with project sizes smaller, but larger scale projects beginning to re-emerge.

Fit-out turnover was boosted to £119m by major data centre work for Santander where the firm abruptly finished work this month.

ISG’s retail arm covering banking and food and high street shops has also been streamlined and now operates under the management of a single team.

Lawther said ISG had seen a fall in new build projects by retail customers and a shift away from major supermarket stores.

Despite the challenges ISG’s order book was ahead by 9% at £766m, of which £512m is for delivery in the current year.

Net cash slipped from £30m last time to £25m with banking facilities renewed until September 2015.

He added: “ISG has delivered an improved performance and growing order book despite the continuing market challenges in Europe.

“In the UK, we have maintained our market leading positions in the office fit out and retail sectors, while our construction business has increased its level of repeat work through its focus on key customers and frameworks.

“We have continued our progress into the engineering services and hospitality sectors, securing another major project in the period.

“Overseas, we continue to enhance our reputation and anticipate seeing growth in the second half.”

UK trading divisions

Construction: turnover £280m (£237m); profit £668,000(-£518,000); margin 0.2%

Fit-out: turnover £119m (£92m); Profit £2m (£2.3m); margin 1.7%

Retail: turnover £164m (£185m); profit £2.6m (£3m); margin 1.6%

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