ISG doubled its pre-tax profits for the year to 30 June, as chief executive David Lawther said it is “increasingly confident” about its future prospects.
The group’s pre-tax profit rose from £1.2m to £2.5m, while net cash was up 42 per cent at £36.1m.
Total group revenue was broadly flat at £1.284bn (£1.281bn in 2012) while underlying pre-tax profits rose by £1m to £8.5m.
Mr Lawther said however that as “market conditions remain challenging we are in the process of reorganising our Construction business into three regions in order to optimise operational efficiency”.
The firm announced in June that it would shrink UK construction volumes and has already carried out retructuring work in the East, the Midlands and the South-west.
The group incurred restructuring costs of £3.1m (2012: £3m) due to completion of reorganising UK Construction operations in the South-west and is currently in the process of reorganising the South-east region.
It has also consolidated retail operations into a single management structure and merged its UK IT teams into a single location.
Mr Lawther said: “In the UK, we have seen signs of improvement in the London office fit-out market and have maintained our market-leading positions in the office fit-out and retail sectors.
“We have had considerable success in the data centre sector. Our UK Construction business has increased its level of repeat work through its focus on key customers and frameworks.”
The chief executive added that the business was performing well overseas and entering new markets as well as making “selective acquisitions”.
During the year, the group amended its segmentation under a revised structure of the businesses with elements of UK Fit Out and Engineering Services (formerly UK Fit Out) now re-segmented to UK Retail and UK Construction.
In separately prepared results sent to Construction News to reflect its overall UK construction activities, ISG said its UK Fit Out & Engineering Services, Retail and Construction division revenues combined were £1.09bn, which was £288m in fit-out, £267m in retail and £538m in construction.
It recorded profit before tax on UK activities of £12.5m, of which £5.2m was from the fit-out business, £5.8m from retail and £1.5m from construction.
Overall pre-tax profit margin across the divisions stood at 1.1 per cent – 1.8 per cent in fit-out, 2.2 per cent in retail and 0.3 per cent in construction.
Dividend was maintained at 9p while its UK construction division saw pre-tax profits rise from £1.2m to £1.5m, with its order book at £391m.
Its forward order book in Fit Out & Engineering Services rose by 89 per cent from £111m in 2012 to £210m.
The average number of employees for the group dropped from 2,604 in 2012 to 2,449 in 2013.
Chairman Roy Dantzic said: “At long last there are positive signs that we are emerging from the economic challenges of the last few years.
He added: “Our UK Fit Out and Engineering Services business saw a significant improvement in profits as it strengthened its market-leading position in the London office fit-out market.
“As the economic conditions improve, the confidence of key customers is returning, particularly in the insurance and technology sectors.”
More to follow.