ISG issues fresh construction profit warning

Aaron Morby 9 years ago

ISG’s construction division is continuing to drag the group down with continuing losses on projects.

In a trading statement this morning the firm issued a fresh profit warning estimating that the poorly performing division was expected to run up a loss of £5m in its first half of the year.

David Lawther, chief executive officer, warned that disappointing UK construction trading would now overshadow strong performances at both its fitout and engineering services divisions.

He said: “We continue to work on the recovery plan for UK construction.

“Despite the many positive steps we have taken, we have continued to experience disappointing project outcomes on some older contracts.”

“With margin and risk control remaining our priority rather than volume and some customers delaying the start on site of their projects, volumes this year will be below our expectations with profit deferred to later periods,” he warned.

“As a consequence, this division will be loss-making this year and will impact the Group results by up to £5m.

Lawther pledged that the board would remain resolute in its ambition to refocus the construction division on core sectors, regions and skills.

In September ISG reported a June year-end loss of nearly £28m following a “painful restructuring of the UK Construction division”.

Today he said: “Work on closing out the final projects on discontinued activities is proceeding in line with our expectations.

“We expect all projects to have reached practical completion by December 2015 and for the vast majority of outstanding commercial issues to have been settled by the financial year-end.”

He said the UK fit-out division had performed well and was currently working on six major London office fit-out schemes worth over £300m.

The engineering services had secured further data center contracts in Continental Europe and the UK while the retail division had seen growth from banking clients.

These divsiions helped to lift ISG’s total order book 12% to £1.13bn. Lawther said ISG expected to end the year with net cash in excess of £50m. (2014: £38.3m).

Latest news

Early bond release key to averting industry surety crisis

Contractors must put pressure on clients to release bonds promptly
6 hours ago

Over 1000 building safety cladding retrofits completed

25% of safety retrofits finished seven years after Grenfell disaster
6 hours ago

Steel import delays make Rangers miss kick-off

Construction work at Ibrox will not be finished by start of next season
21 hours ago

Lidl looking for new contractors for store building plans

Sign up for events in Newcastle, Glasgow, Birmingham and Southampton
6 hours ago

Utility firm GTC revs up for ground source heat pump era

Contractor and heat pump maker strikes ground-breaking deal
6 hours ago

Amey switches kit supplier to Speedy from HSS

New plant and equipment hire deal worth £25m a year
1 day ago

Clients under spotlight after bond bombshell

Contractors call for action to avoid project delays
1 day ago

M&E specialist Lorne Stewart falls into the red

Parent group suffers £2.8m loss in face of cost inflation and insolvencies
1 day ago

Four men rushed to hospital after site accident

Eye-witnesses report a wall was knocked over on Edinburgh site
2 days ago

World’s tallest scissor lift set for UK sites

Hire Safe Solutions partners with Dingli to supply lift with working height of 37 metres
1 day ago

Barhale wins £36m East London sewer remediation

Northern Outfall Sewer in West Ham runs above railway lines in the city
1 day ago

Weston Homes thumbs-up for £220m Essex homes scheme

Colchester 600-home Viridis scheme gains outline consent
1 day ago

Balfour seals £192m deal for trio of Scottish substations

Work to start this summer to enhance electrical transmission in Argyll
2 days ago

Construction bond bombshell as major player quits market

QBE currently provides cover for 20 of the industry's 30 biggest contractors
2 days ago

United Utilities names another 18 winners for £2.7bn water spend

Water giant cuts out large management contractors in latest spending round
3 days ago

Green light for £130m Dundee Eden project

Former gasholder site to be transformed into green house
2 days ago

Four tower scheme in Glasgow gets green light

Go-ahead for major mixed-use scheme at Central Quay
2 days ago

‘Green collar’ construction workers earning £134,000

Cost consultant T&T says insulation and heat pump trades earning £70 an hour in London
2 days ago

£65m Trafford Waters resi blocks approved

X1 Developments plans over 200 homes in 13- and 8-storey blocks
2 days ago

Over 100 firms win £1.5bn ICN housing framework

Great Places Housing Group names key partners for new homes programme
3 days ago

Steelwork firm went down owing £4.5m to suppliers

Subcontractors left holding unpaid invoices from SH Structures
3 days ago

Scottish civils firm to buy stake in piling specialist

Advance Construction in talks for 25% stake in Northern Piling Ltd
3 days ago

RSK secures £500m for fresh acquisitions spree

Acquisitive group aims to buy another 200 businesses by 2030
4 days ago

Beal Homes gets green light for £105m Humber scheme

Work to start on more than 500 homes in North East Lincolnshire
3 days ago

RED wins £20m East London office refurb

Grade II listed Victorian building to be upgraded to Cat A offices
3 days ago

Employee-owned Neilcott staff share £250,000 payout

Employee-owned building contractor sales jump 38% to £139m
4 days ago

Geoffrey Osborne supply chain hit for £26m

More than 500 suppliers and subcontractors left holding unpaid bills
1 week ago

Race for £800m South West Wales framework

Up to 16 firms face fight to renew spots on regional contractors framework
5 days ago

SME contractors agree 4% pay rise for site workers

Workers will also get an extra day of holiday
7 days ago

South East expansion paying off for Meldrum Group

Turnover up to £55m as North East based contractor expands national coverage
4 days ago

Contractor services