HOW long will it take for the revival in the commercial sector to gain real momentum?
The Construction Products Association suggests that commercial spending has bottomed out and is 'tip-toeing to recovery'but shareholders in electrical subbie T Clarke will be looking for heavier footfalls.
The firm did manage to beat analysts' expectations at the half-year stage, topping broker Arbuthnot's interim profit forecast of £3.1 million by £400,000, but still recorded a decline in profits.
Arbuthnot has since downgraded its full-year forecasts for pre-tax profits by £900,000 to £7.5 million, despite expectations that sales will edge up marginally by £3 million to £146 million.
T Clarke's management is not known for over-selling the company, but recent expansion out of the firm's heartland of London and the south-east appears to be paying off.
T Clarke is also working in other sectors with success and, while the City remains mostly enthusiastic, this is tinged with caution due to the state of the commercial sector.
This is a core source of orders and until there is a major upturn, contractors will keep trying to hammer T Clarke's margins because there is overcapacity in the market place.
T Clarke tried to keep the City on side by raising the interim dividend by 2p to 10p and the business remains a cashgenerator.
This is not sustainable in the long term, unless profits start motoring upwards and the commercial sector looks to be the catalyst for that event.