Construction conglomerate Montpellier has announced that it intends to take a conservative approach to acquisitions from now on
Montpellier has been the subject of acquisition rumours recently, and only last week told Building that it was bidding for the UK arm of Dutch contractor Ballast Nedam.

Managing director Paul Sellars said: "We are quite cautious at the moment. I want to be careful about what we are taking on. We are taking a prudent approach."

The policy shift came as Montpellier, which is the parent company of contractor YJL, announced post-tax profit of £3.4m for the six months to 31 March 2003, an increase of 31% on the same period last year. Turnover fell £6m to £211.5m.

However, Montpellier's preferred profit figure includes a share of profit made by "associates" and £403,000 in tax owed by the Inland Revenue. Associates are defined as firms in which Montpellier has a holding of more than 30% plus a seat on the board.

Montpellier's operating profit, excluding profit made by associates and the tax return, was £840,000, a fall of 67% from the same period last year.

The group's administrative expenses increased from £16.7m to £19.7m. Sellars blamed this on the cost of running Union Investment Management, bought by Montpellier in 2002 to provide financial advice on further acquisitions.