May Gurney riding high on public sector cuts

May Gurney, the infrastructure support firm, believes it's going to get a big boost from the public sector's financial woes.

For the year ending on March 31st May Gurney saw underlying profits before tax up 17% on the previous year at £28.4m, which was just ahead of the consensus forecast of £27.7m.

Revenues were also strong, rising 22% compared to 2010/2011 to £695.3m.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues 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

Sign up

May Gurney is already benefitting from cost cutting across the public sector and expects the trend to continue, adding: "It is expected that there will be further cuts in public spending and we believe that the impact of the next Comprehensive Spending Review will drive further outsourcing of services which are currently in-house - like highways, transport and environmental services - to address the imperative to reduce costs."

To underline the point, the order book now stands at £1.5bn, up from £1.4bn this time last year, with a £4bn pipeline of "bidding opportunities".

Not surprisingly, confidence is high, leading to a 28% increase in the total dividend to 8.42p per share.

The market likes what it sees from May Gurney, at 11:53 the shares were up 7.5%.

BS