May Gurney profits plunge in first half results
Underlying profits at support services provider May Gurney fell to 1.1m pounds in the first half of 2012, compared to 14.5m pounds in the corresponding period last year, according to the group's interim results published on Tuesday.
Underlying profits at support services provider May Gurney fell to 1.1m pounds in the first half of 2012, compared to 14.5m pounds in the corresponding period last year, according to the group's interim results published on Tuesday.
The results, which cover the half year ending September 30th, showed a reduction in underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) and overall operating margin, although the company posted £314m of new business.
Underlying EBITDA was £12.6m, compared to £14.7m in the first half of 2011 and the group's overall operating margin was 3.7%, compared to 4.5% a year earlier.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The decline in operating margin was connected to a number of factors, including poor weather over the summer and underwhelming performance from two environmental services contracts.
The group's surface dressing operations were negatively affected by poor weather and a short-term downturn in rail services. In addition, provisions for SGN's reduction in outsourcing and poor performance of two MaGOS environmental services contracts contributed to the operating margin decline.
At the half-year, no provision for future losses had been made in respect of the two MaGOS contracts and the group said this would be reviewed again at the year end.
May Gurney secured £314m of new work and contract extensions in the first half of 2012, up from £290m in the corresponding period last year. Group revenue rose 4.0% to £338.9m, compared to £324.7m in the corresponding period last year.
Margaret Ford, Chairman of May Gurney, said: "May Gurney's first-half performance was in line with our revised expectations. We have taken steps to reinforce commercial disciplines and the plans we put in place to address the operational issues we announced in September are on track. As expected, the process to resolve the two MaGOS environmental services contracts is complex, and will continue well into next year."
The share price was unchanged at 14.04 GMT at 172p.
MF
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
How ‘Bed & ISA’ could save you £15,000 over a decade
Moving your investments into a tax-free wrapper through ‘Bed & ISA’ transactions could save you thousands over the long run by cutting your tax bill
By Katie Williams Published
-
House prices hit record high, says Halifax
UK house prices rose 3.9% over the past year, with a typical property now costing £293,999. We look at which regions are seeing the strongest growth, and whether the rally in house prices will continue next year
By Ruth Emery Published