Focus on margin improvement is paying dividends, says chief exec
North Midland Construction, the Sutton-in-Ashfield-based contractor, has reported a doubling of first half pre-tax profits, boosted by strong performances in its highways, water and construction operations.
The group said turnover for the six months to the end of June rose 19% to 拢161m and pre-tax profit increased by 104% to 拢2.5m. It also more than doubled its cash position to 拢18.9m.
While the firm鈥檚 telecoms business made a 拢1.6m loss, the deficit was compensated by the construction division鈥檚 operating profit of 拢1.22m on near-doubled revenues of 拢22m.
Its highways arm posted an operating profit of 拢700,000, despite turnover dipping 35% to 拢14m.
And its water division posted an operating profit advanced to 拢2.6m, a near trebling of the previous year鈥檚 拢1m, on revenues of 拢112.1m, up by nearly a third.
John Homer, NMC鈥檚 chief executive, said the results 鈥渄emonstrate the continued progress made in the business against our strategic objectives.
鈥淥ur focus on margin enhancement and cash generation is beginning to show returns and is anticipated to continue going forward.鈥�
The group said last month鈥檚 appeal against a High Court judgement regarding an outstanding legacy contract with Cyden Homes over a deal to build a large residential house and outbuildings called South Farm in Lincolnshire had failed.
Consequently 鈥渁lternative strategies for making appropriate recovery under this contract which had already been designed in parallel are now being fully implemented鈥�.
North Midland said the financial impact of this move had already been recognised in its 2017 accounts. The group had set aside 拢7m to cover the legacy deals.
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