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.

Start your trial of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

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