Contractor’s operating profit falls to £2.5m as public sector cuts start to bite
Contractor Leadbitter has seen its operating profit halve in the first six months of the year with expectations that its order book will decline further in the coming months as it feels the impact of public sector cuts.
The contractor has seen its operating profit fall to £2.5m while revenue dropped slightly to £152m. Its order book grew to £327m, up from £242 for the same period last year, following several major social housing schemes being awarded shortly before the election. However, it expects that this order book will decline in the next half-year.
The firm said earlier in the year that it would target areas including the mid-range hotel sector and food retail in order to offset cuts in public sector spending.
The results come as parent company Heijmans published its half year results, which show a profit of £3.3m compared to a £35m loss for the same period last year.
The company reports improvements, mainly in the Netherlands, where profit has more than doubles to £11.5m and the number of new homes sold has increased for 450 to 683.
Gerrit Witzel, chairman of the Heijmans, said: “Our results in the first half of 2010 demonstrate a clear improvement. Even though the residential market shows some weak signs of modest recovery, the market conditions remain very difficult”.
Looking forward he said the strategy remains focused on the Netherlands and barring any unforeseen circumstances, the company expects 2010 to end in profit.