Contractor T Clarke saw pre tax profits fall by 64 per cent to £0.5 million in the first six months of 2012 on the back of tough markets and further restructuring costs, it reported today.
Posting its interim results to 30 June, the M&E and building services firm said revenue dipped slightly to £90.7m, compared with £92.6m in H1 2011, while pre-tax profit fell from £1.4m to £0.5m.
The results included another £0.4m of restructuring costs, half of which were in its Southern division - which includes London and which saw a pre tax loss - with other costs in the north and Scotland.
The firm said the market had been been slower than they had hoped, with the “highly competitive environment” putting pressure on margins.
But it remains confident of significant revenue progress in the second half.
T Clarke’s order book grew from £193m in June 2011 to £230m by the end of June 2012, while net cash was slightly up from £0.6m at 31 December 2011 to £0.7m.
New contracts include LOCOG Event Maintenance, 240 Blackfriars for Great Portland Estates and Data Centres in Buckinghamshire, Newcastle upon Tyne and Northamptonshire.
Completions for the first half of the year included The Emirates Airline, the UK’s first urban cable car and The Shard, London Bridge.
Chief executive Mark Lawrence said: “I am pleased to report that T Clarke has remained profitable and cash generative in the face of extremely challenging market conditions.
“We are delighted that our forward order book has strengthened to an impressive £230m. Whilst our core markets face prolonged margin pressures, we continue to have a proven track record for delivery on the UK’s most iconic projects, none more so than can be seen across the London skyline, The Emirates Cable Car, The Shard, Westfield Stratford City and the London 2012 Olympic Stadium.
“In these uncertain times clients, principal contractors and our supply chain continue to be reassured by the stability and strength of T Clarke and the diversity and resilience of our business.”
Panmure Gordon analyst Andy Brown said: “H1 results have missed our forecast, but despite healthy order books pricing pressure continues so FY results will now be below expectations.”
T Clarke said the tough London commercial sector affected profits in its southern division, which made a pre tax loss of £77k (2011: £0.4m profit) on revenue of £60.7m (2011: £67m). That division incurred £0.2m of restructuring costs, £0.2m for a previous acquisition and £0.3m in finance costs.
T Clarke has continued to streamline its Scottish business with a plan to develop a “whole life care” solution over the next 18 months. It saw a pre-tax loss of £241k (2011: £312k loss) on £6.8m of revenue (2011: £9.7m) after restructuring costs of £0.1m.
T Clarke’s northern business – specialising in FM – saw pre tax profit fall to £0.6m (2011: £1.1m), after £0.1m restructuring charges.