ISG has been hit by a 61% drop in profit for the six months to 31 December 2009.
The contractor posted a pre-tax profit of 拢2.4m for the period, compared to 拢6.3m for H1 2008. Revenue was also down, by 14%, to 拢484m, as ISG felt the economic downturn in one of its core markets, commercial offices.
However, the firm was upbeat about its outlook, and said it would pursue further growth organically or through acquisition.
ISG鈥檚 profit would have been higher but for a 拢1.9m exceptional item, representing the firm鈥檚 estimate of fines and legal costs relating to the Office of Fair Trading's cover pricing investigation of two subsidiaries, Propencity and Pearce, prior to ISG's ownership. It has lodged an appeal against the fine imposed on Pearce.
ISG鈥檚 order book in December stood at 拢780m, a drop of 18% on a year previously. Some 63% was private sector work.
Net cash at the end of the half-year was 拢32m, ahead of the 拢26.8m reported at the end of 2008.
ISG said it saw a recovery in the corporate office market during the last quarter of 2009, which had been severely hit by the global economic and banking crises.
鈥淥ur blue chip clients have recommenced their capital investment programmes across London, Europe, Middle East and Asia,鈥� said chief executive David Lawther.
He added that there had been strong demand from UK food retailers and UK bank branch roll-out programmes throughout the economic slowdown, though demand was weak from UK high street retailers.
Lawther said ISG鈥檚 regional construction businesses had a 鈥渟trong鈥� first half.
鈥淗owever, we are planning for the likelihood of reduced volumes and project sizes in public sector work. On top of flat private sector demand in the regions, this will increase competitive pressures.鈥�
Lawther said the group was targeting three main markets:
- Multinational corporate office and retail fit-out, across the UK, Europe, Middle East and Asia;
- National food retail customers across the UK;
- Regional-based construction across the UK.
鈥淲hile our markets remain highly competitive, we have weathered the worst of the fallout from October 2008 and as these results demonstrate we are emerging in good health,鈥� summarised Lawther.
鈥淲e now feel confident that the Group is well placed to resume the growth path demonstrated from 2004 through to 2008 as the markets recover. We will continue to pursue organic growth and
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