ISG has reported that costs from closing out construction contracts has gone up, but this is offset by better performance elsewhere
The board of ISG has said that costs from closing out contracts in its UK construction arm are expected to rise, but this will be offset by better performance in the rest of the business.
The UK construction arm has three contracts still to complete on site from the 360 it entered into between 2011 and 2013, the board added in a trading update, put out in response to the extension of US Investor Cathexis’ takeover offer yesterday.
The costs from closing out these contracts will be offset by good performances in ISG’s UK fit out and engineering businesses which “continue to outperform”, and are expected to exceed expectations.
ISG’s board said the company’s results are expected to be in line with expectations post its profit warning in December. Its order book stood at £1.1bn on 31 December 2015.
Cathexis has extended its £1.43 per share offer till 1st February for a second time after it only secured support from 1.7% of ISG shareholders by the close of the first extension on 26 January.
ISG’s board said the “very low level” of acceptances of the offer was a clear indication that the company’s shareholders agree with board in its continued rejection of the offer.
The costs of defending the offer from Cathexis will be reported in the firm’s interim results on 8 March.
Cathexis’ offer - a 17% premium on ISG’s closing share price on 19 December 2015 - values the company at £71m. ISG shares were this morning trading at £1.42 per share.