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Company spotlight: Birse

FINANCE

BIRSE is beginning to look more and more like a civil engineering contractor.

The higher risk of working on big civils jobs is traditionally not something that the City likes but it is taking to Birse.

The firm's recent disposal to Speedy Hire of its cabin hire operation for £6.3 million leaves Birse with a building operation that will soon turn over less than £50 million a year, a plant business and a process operation.

Birse is not quitting plant and will retain its crawler crane operation and piling rigs and is not exiting building, but civils comprises the bulk of the operation.

Cash from the cabin sale will be used to pay down borrowings with the group's net bank debt standing at £8.7 million at the end of last October.

The deal with Speedy also includes a five-year hire agreement, allowing Birse to focus on contracting.

As part of the civil business, Birse has a rail arm and a separate operation devoted to London Underground.

Overall the civils operation made a £5.6 million operating profit on £126.3 million turnover in the half year to last October and is working to an almost unheard of margin of 4.4 per cent.

That is why, with process barely breaking even last time round and building posting a loss, the City is all too happy that Birse is starting to look like a civils contractor.