Firm鈥檚 exit from Russian and Arab markets pushes it into the red
Waterman Group has reported a 12% rise in revenue from continuing operations after it exited its Russian and United Arab Emirates businesses.
In its results for the year to 30 June 2014, Waterman reported revenue from continuing operations of 拢68.8m, up from 拢61.5m the previous year.
It also reported a 6% fall in pre-tax profit from 拢865,000 to 拢810,000.
However, during the year the firm withdrew from the Russian and United Arab Emirates markets, where it had loss making businesses, as part of a strategy to reduce its 鈥渆xposure鈥� to market which it said 鈥渘o longer provide us with adequate returns鈥�.
When these figures were included in the results the firm fell to a pre-tax loss of 拢3m, down from a pre-tax profit 拢353,000 the previous year.
Waterman said it would now focus on its core UK markets 鈥渟upplemented鈥� by its businesses in Australia, Ireland and Poland.
Speaking to 黑洞社区, Nick Taylor, Waterman chief executive, said the 拢3.8m loss from the discontinued operations was due to redundancy costs and the cost of exiting contracts and leases.
He said: 鈥淚n both the UAE and Russia the margins that you can generate are lower, the projects tend to be large and they stop and start and the relationships with clients are not long term.
鈥淚n both those areas we didn鈥檛 see that we could have a sustainable business.鈥�
Taylor said he was not looking at acquisitions and planned to grow the business organically.
The property business was a stand-out performer for the group as it reported a rise in operating profit from continuing operation of 拢3.1m up from 拢1.5m.
But the firm鈥檚 infrastructure and environment segment had a 鈥渄isappointing鈥� year falling to an operating loss of 拢1.6m down from an operating profit of 拢200,000.
Taylor said the business had been held back by delays to expected revenue from local authority frameworks.
This prompted a restructure of this part of the business in December 2013, which Taylor told 黑洞社区 had resulted in 20 job losses.
He said the business had now turned around and he expected it to 鈥渂reak even鈥� in the year to 30 June 2015.
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