ISG margins squeezed as orders hit record £1.9bn

Aaron Morby 1 year ago

A series of hyperscale jobs placed ISG on a steady footing at the start of the year after its order book swelled 18% to a record £1.9bn.

CEO Matt Blowers said ISG started with a healthy cash balance, zero debt and its best-ever forward order book
CEO Matt Blowers said ISG started with a healthy cash balance, zero debt and its best-ever forward order book

ISG’s Fit-out and Construction operations demonstrated strong resilience against a challenging global economic backdrop in 2022 maintaining group revenue at a record high of £2.2bn.

But the challenges impacted average group operating margin which was squeezed to 0.5% from 0.83% previously.

As a result reported pre-tax profit dropped to £11.5m from £18.5m in 2022.

In his first year as chief executive, Matt Blowers saw the firm secure its largest ever job, a £600m order to deliver the Sunset Waltham Cross Studios development in Broxbourne, Hertfordshire.

ISG also made inroads to the biopharmaceutical sector with a £200m deal this year for a vaccines manufacturing plant on Teesside.

Blowers said: “Our record forward order book reflects the demand for our unique and specialist services.

“In addition to our traditional sectors, we are increasingly working on hyperscale schemes in growing segments, including semi-conductors, film studios, future mobility and life sciences.”

Fit-out continued to dominate profit generation contributing £32m, while mainstream construction produced a more modest £4.8m profit from £1.2bn revenue.

ISG trading divisions in 2022
Revenue Change EBITDA Change Order book Change
Construction £1.2bn n/c £4.8m 23% £1.3bn 21%
Fit-out £989m -0.4% £32m -9% £576m 20%

During 2022, the Fit-out business launched a low-carbon retrofit offer to prospective clients looking at retro-first approach to assets.

ISG maintained its zero-debt status and continues to hold a healthy net cash balance of £105m.

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