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Shepherd's profits hit record high in 2006

FINANCE - Portakabin performance helps offset 'tough conditions' for homes division

A STERLING performance from its portable buildings operation helped Shepherd compensate for an increasingly tough contracting arena and post record results for a second year in a row.

Shepherd lifted pre-tax profits by £7.3 million to £42.7 million in the year to June 2005, with Portakabin providing £24.6 million of the latest earnings.

Chairman Alan Fletcher said: 'Increasingly competitive conditions in the construction industry have again adversely affected margins in a sector already typified by low margins. This has had a consequential adverse impact on profitability.

'In addition, losses arising on a small number of projects were a disappointing aspect of performance.'

Shepherd Group turned over £725.2 million during 2006 - up from £655.9 million.

Pre-tax profits at Shepherd Construction, which employs 1,000 of the group's 3,500 staff, were up by £100,000 to £2.7 million, Building services division SES returned to the black with an £800,000 profit after losing £950,000 in 2005 but Shepherd Homes was hit by planning delays and profits fell £900,000 to £9.2 million.

Shepherd does not disclose the number of units sold but the average sale price was £199,000 and the division, which has a consented land bank of 1,000 plots, had an operating margin of 30 per cent.

Shepherd's development arm contributed £5.6 million in profits and bulk handling firm Portasilo made £700,000.

Contracting margins are suffering but the group has £80.9 million in the bank compared with £57.5 million a year ago.