Shares in support services group Alfred McAlpine hit a five-year high this week after it reported a good set of results and a positive outlook for 2006.
Shares hit 482p on Monday after McAlpine revealed a 12% hike in underlying pre-tax profit to £37m.
Chief executive Ian Grice was keen to stress that the company's greater emphasis on support services had paid off after a difficult four years during which problem contracts led to a restructuring.
Support services now comprise two-thirds of operations at McAlpine, which switched from the construction sector to support services on the stock exchange last year.
But Grice said McAlpine would not follow the same route as companies such as Gleeson by pulling out of building. "We will stay in construction as it's part of our life-cycle offering," he said.
A 12% rise in turnover for the year to 31 December pushed the company through the £1bn barrier for the first time; Grice described this as "just another marker on the road".
McAlpine has won £800m of business in 2006, and significant wins last year included an expansion of its contract with airport operator BAA, as well as new work for clients including British Telecom, Scottish Enterprise, Yell, Yorkshire Water and the Scottish Courts.
Grice described breaking through the £1bn barrier as ‘just another marker on the road’
Its most significant win, however, was a facilities management contract worth about £50m a year on behalf of client Mapeley, the property investment and outsourcing company. That contract runs until 2021.
In February, McAlpine combined its Capital Projects and Project Investment business into Project Services, which provides building and civil engineering services to the private and public sectors, including PFI work.
Underlying pre-tax profit at that division rose 2% to £16.5m. The infrastructure services business was the worst performing, with a 44% fall in underlying pre-tax profit to £4.2m. Grice said that "having been through challenges", that business was improving, helped by the appointment of a managing director, finance director and commercial director, as well as a restructuring of the operational team.
During the year McAlpine sold its interest in two PFI projects - Mercia Healthcare and South Manchester Healthcare. Grice said the company was not looking to sell PFI stakes but at the same time it was not a long-term holder, and that further disposals were possible.
The board recommended a full-year dividend of 13.3p a share, up 10%.