The market reacted badly to the interim results from social housing maintenance specialist Inspace as it announced a drop in turnover and “tendering frustrations” this week.
Shares dropped 3% to 105p a share as it revealed an 11.5% fall in turnover to £62.6m, down from £70.8m for the six months to 30 June. This was despite turnover being in line with market expectations.
However, pre-tax profit grew 6.8% to £3.7m, up from £3.4m. The operating margin increased to 5.7%, up from last year’s 5%.
Andrew Telfer, chief financial officer, said: “The analysts say we are underrated. I think as people get to understand the market better in the long term the price will improve.” Analysts say Inspace will be worth £300m by the end of next year. It now has a market value of £70m.
Inspace, which is listed on the alternative investment market, has agreed to pay £64.5m for Willmott Dixon’s social housing arm Widacre.
Telfer said the frustrations were caused by delays in receiving tender documents from local authorities, but added that “the pipeline is now full”.