M&E contractor T Clarke has predicted a resurgence in the London office market by next year despite a 50% fall in its profit for the first half of 2004.

The firm said the pace of property development in the capital was picking up, and commented that “the prospect of greater activity is encouraging”.

Pat Stanborough, chief executive at T Clarke, said: “Our pipeline of work is excellent and we look forward to 2005 and 2006 when we predict that our markets will return to more favourable conditions.”

The optimism came despite a sharp drop in performance by the group. Pre-tax profit was fell by half to £3m for the six months to 30 June 2004. Group turnover was fell £7m to £71m over the same period last year.

Stanborough blamed the performance on difficult market conditions. He said: “As we have flagged up for some time, this half has proved to be challenging”.

However, T Clarke said the trading environment would be better in the second half of 2004 particularly in the Home Counties. As a result, the firm has raised its interim dividend 2p to 10p. The firm said that it would aim to expand its regional network, particularly in the south-west of England.

We look forward to 2005 and 2006 when markets will be more favourable

Pat Stanborough, chief executive, T Clarke

It also pointed to recent contract wins, such as a new hospital in Romford, Essex, for Barking, Havering and Redbridge Hospitals NHS Trust and the Drakes Circus shopping development in Plymouth.

The contractor received a buy note by construction analyst Arbuthnot. The analyst reduced its 2004 and 2005 forecasts for T Clarke but said the firm was still in a healthy state. It said: “The 25% increase in the interim dividend to 10p and the good trading and cash outlook are very positive.”

  • Contractor Connaught has completed the acquisition of Glasgow-based maintenance service business Maginnis for £2.5m.

The firm also announced a six-year, £100m deal to refurbish 6000 properties in Hackney, north-east London, as part of the government’s Decent Homes programme.