Construction

Order books grow at ISG

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Revenue for the half-year was £659m (2011: £623m) and pre-tax profit was £2.2m (2011: £2.3m). Underlying profit before tax was up 4% to £3.8m.

Much of the expansion came from its UK Construction division, where revenue increased by 18% to £280m (2011: £237m). This was at the back of London 2012 Games overlay works contract. Operating profit for this division was £700,000.

ISG’s construction order book has increased by greater than 8% to £409m (2011: £377m), with 65% from the non-public sector. Two years ago the work was two-thirds public sector.

The company’s UK Fit Out division also grew revenue – to £119m (2011: £92m) – but operating profit slide to £2.0m (2011: £2.3m).

ISG said that the London office fit out market remained competitive, with project sizes smaller, but larger scale projects were starting to re-emerge.

There was increased revenue from the growing engineering services market.

ISG’s UK Fit Out order book is up 83% to £170m (2011: £93m).

The office fit out business in France and Germany also performed well, but Italy was weaker.

The UK Retail division suffered a drop in both revenues and profits, as expected. Operating profit was £2.6m (2011: £3.0m) on revenue of £164m. The order book this is also reduced at £102m (2011: £148m) as retailers pull back on investments.

Chief executive David Lawther said: “ISG has delivered a far better performance and growing order book despite the continued market challenges in Europe. Within the UK, we’ve got maintained our market leading positions within the office fit out and retail sectors, while our construction business has increased its level of repeat work through its talk about key customers and frameworks.  We’ve got continued our progress into the engineering services and hospitality sectors, securing another major project inside the period.  Overseas, we continue to enrich our reputation and anticipate seeing growth within the second half.

“We will continue to regulate our cost base, to focus on growth sectors and to speculate in our overseas businesses.”