Imtech UK suffers job cuts as margins slide

Aaron Morby 8 years ago

Building services contractor Imtech UK has cut its staff headcount by 6% so far this year as margins and turnover were eroded.

Staff numbers fell by 222 to 3,174 employees in the first six months of the year as it streamlined the engineering services business.

Latest results showed that the UK and Northern Ireland building services business recorded a loss before tax and interest of £1.4m in the second quarter.

Across the first six months of 2014, profits slumped from £12m to just £800,000 on sales down nearly a quarter at £241m.

Operating margins took a big hit falling to 1.6% from 3.9% during the same period last year.

The disappointing performance was revealed today as the highly indebted Dutch parent company revealed it had sold its ICT division to Vinci for £179m and raised £477m from a rights issue.

The deal is understood to include the sale of the Imtech UK ICT operation headquartered in Basingstoke.

Gerard van de Aast, CEO for Imtech Group, said: “Today’s announcement is a decisive step forward for the company.

“The sale of the ICT division combined with a fully underwritten rights issue and significant changes in the financial agreements, such as a step-down in pricing and increased liquidity, will significantly reduce debt and improve the financial structure.

“The support from all our financiers and in particular from ING, Rabobank, Commerzbank and ABN Amro is a strong signal of confidence in the company.”

He added that market conditions during the second quarter of the year remained challenging in the Netherlands, UK, Finland and Sweden.

“Within the Dutch industrial businesses, the UK engineering services and water businesses and in Sweden, we noticed continuing longer lead times from customers.

“During the quarter, some of our operations were impacted by the turmoil and uncertainty among stakeholders regarding our financial position.”

Both revenue and operational profits in the UK were lower due to low production levels as a result of some slow project start-ups.

Among a £150m crop of new orders in the last three months, Imtech UK secured the mechanical and electrical installation at a new research facility for the University of Birmingham and the refurbishment of Wedgwood’s main factory.

After a change in the license system by the government in Kazakhstan, the UK business decided to terminate its joint venture in Kazakhstan and pull out of the country.

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