ISG plc (“ISG” or the “Group”), the international construction services group, today issues this trading statement covering the period 1 July to 4 December 2014, ahead of its AGM which will be held later today.
The Board is pleased to announce that overall trading since the start of the financial year has been in line with expectations, with particularly strong performance being shown by our UK Fit Out and Engineering Services business offsetting continuing difficult trading conditions in UK Construction.
At the end of October, our total order book had increased by 10% to £1,010m (October 2013: £915m) of which £770m (October 2013: £686m) is for delivery in the current year. The balance sheet remains robust and we anticipate a net cash position of circa £35.0m as at 31 December 2014 (2013: £33.3m).
Our UK Fit Out and Engineering Services business goes from strength to strength, running ahead of our expectations in terms of turnover and profit for the year. We are currently working on nine major (>£15m) London office fit out schemes with a combined value of over £300m. Our engineering services offer continues to grow as we have secured further data center contracts in the Nordic region, as well as elsewhere in Continental Europe and the UK.
Our UK Retail business continues to expand its order book in both the retail and hospitality sectors and is on track to exceed expectations for the year. It is delivering new stores, extensions and refurbishment projects for major UK food, bank, fashion and department store retailers, and as market leader, is benefitting from being in the forefront of rapid innovation in retail formats.
We are also pleased that new contract wins in UK Construction continue to be achieved on better terms and at improved margins. However, the business will incur a loss in the first half of this financial year due to the commercial pressures on many of the older contracts entered into more than eighteen months ago that are now approaching final completion. The management of the business is focused on bringing these contracts to finality in the second half.
Looking across our overseas businesses, we are seeing improved performances from both our Middle East and Asian operations. In Continental Europe the subdued market conditions continue and we have seen a decline in activity levels, particularly in France. Our recent Spanish acquisition is showing promising signs as confidence starts to return to that economy and we anticipate the business making a significant contribution to our profits in Continental Europe this year.
Our focus on key market leading positions and our diversification strategy have resulted in the Group’s most secure trading base in its 25-year life. This provides the Group with a strong platform for future growth from which to continue to take advantage of new market opportunities. We anticipate the results for the full year being in line with the Board’s expectations.
Shareholders will next be updated on the Group interim results for the six months to 31 December 2014 on 3 March 2015.
5 December 2014