Profits for Imtech in the UK and Ireland fell by over 20 per cent in the first half of 2013 compared with the corresponding period in 2012.
A statement to the stock exchange from Imtech UK’s Dutch parent firm, Royal Imtech, showed profits before interest and tax for the UK and Ireland fell from £16.1m to £12.6m in that time.
The firm’s pre-tax and interest profit margin fell from 5.5 per cent to 3.9 per cent. But its revenues rose from £295m to £323.4m driven by its acquisition of energy and utilities specialist Capula in May 2012. The statement said the firm’s water, waste and energy business means it can offset the weaker UK market for engineering contracting.
It also took on more staff in the UK and Ireland, growing from 3,498 to 3,797 employees.
Its order book stood a £442m in the first half of 2013 and it took in £292.7m of orders in that time. They include a £17.3m deal to provide mechanical and electrical services for the redevelopment of the Olympic stadium and surrounding podium areas in London into a multi-use facility. It said the order intake was lower than revenue because of high production levels and a weak market for engineering contracting in the UK.
Parent firm, Royal Imtech, saw its revenue fall slightly from £2.18bn to £2.14bn between the first halves of 2012 and 2013. Its losses before interest and tax shot up from -£36.5m to -£128m in that time.
Royal Imtech said it was not making any forecasts for its performance in 2013 because it was undergoing a “significant transition”. It has previously announced large scale restructuring and redundancy plans.
The statement oulined Royal Imtech management’s belief that the company would continue to operate as a “going concern” thanks to a restructuring programme, which includes 1,300 redundancies, beefed up management and anticipation of a recovery of profitability in the Benelux, Germany and Eastern European businesses.
The statement said the group had taken account of safety margins between budgets, forecasts and limits set by its financing covenant requirements.
But it also warned that there was “a risk that this recovery does not occur due to deteriorating market conditions, delay in order intake or slower than expected business performance recovery, [for example] if restructuring measures do not pay off [in a] timely [way]. This may result in impairments. If this risk materialises it may result in a covenant breach in the course of 2014”.
Royal Imtech will hold an extraordinary general meeting of shareholders on 8 October to vote on amendments to its rules to allow the conversion of preference shares to ordinary shares, the pay of the supervisory board and the composition of the group’s board.