Heavy order books should buoy up contractor in 2008

Contractor Tolent has announced a 6% rise in pre-tax profit for 2007, with turnover up by 7%, following a strong performance in the second half of 2007.

Pre-tax profit for the year ended 31 December rose to £5.5m, from £5.2m a year earlier, with turnover increasing from £168.2m to £180m.

The UK construction and property company said its second-half revenues were shored up by orders and contracts delayed in the first half of the year. Its order book at the start of 2008 stands at £128m.

While its “substantial” construction workload should protect it to some extent in 2008, Tolent said that market uncertainty could have a greater impact in 2009.

Brewin Dolphin Investment Banking said the 2008 earnings-per-share forecast had been reduced by 2% “to reflect a more prudent view of potential development profits” and the 12-month price target had been brought down from 385p to 265p to reflect the de-rating of construction stocks since mid 2007.

The company still provided an attractive investment, it said, thanks to it yield of over 9%, average net cash balance during 2007 of £12m, £6.8m investment property portfolio and lack of final salary pension scheme.