Amec reported a 20 per cent increase in pre-tax profits, while Danish support services group ISS adjusted its growth forecast for the year on the back of a 25 per cent increase in turnover for the six months to June. Although Rentokil Initial reported a fall in pre-tax profits, operating profits were up 7.7 per cent and WSP reported a 53 per cent increase in turnover from existing operations.
Amec's 20 per cent increase in underlying first half profits was attributed to the company's growing number of higher-margin contracts with energy firms, and private finance initiatives. The firm's involvement in oil and gas projects around the globe has so far protected it from falling victim to the slowdown in other sectors.
The group's decision to abandon what chief executive Peter Mason described as the 'bump and horrors' of the construction market has enabled Amec to become service-led. It is now bidding for 10 PPP contracts including London's Docklands Light Railway and Manchester Metrolink. However, none of these are expected to reach financial close before the end of the year.
Profits before goodwill amortisation and exceptionals increased from £32.4m to £38.8m in the six months to 30 June. Pre-tax profits after exceptional charges of £9.1m increased marginally from £29.7m to £29.9m.
ISS reported first half turnover of £1.4bn, a 25 per cent increase on the same reporting period last year and an increase in operating profits of 28 per cent to £66m. The group has already met financial growth targets outlined in its five-year business plan. The growth forecast has now been adjusted to accommodate the expected increase in turnover from the acquisitions the firm has made so far this year, despite an expected downturn in organic growth due to its reduced contract portfolio.
Rentokil reported a 7.7 per cent increase in operating profits in the six months to 30 June, but recovery was not seen in its facilities management division, which continued to decline with operating profits down 3.6 per cent to £18.5m.
Group turnover fell from £1.42bn to £1.1bn, although sales from continuing operations rose 8.6 per cent to £1.1bn. Company chief executive Sir Clive Thompson said that improved operating procedures and the sale of 13 businesses last year had added to the improvement.
WSP benefited from a number of acquisitions in the six months to 30 June, including the £72.5m purchase of Swedish consultants Jacobson & Widmark, which increased pre-tax profits by 37 per cent to £5.43m.
Acquisitions made by the group in the last 18 months have bolstered existing business units. WSP plans to extend the global reach of its business through organic growth and acquisitions.
Taylor Woodrow said that facilities management had been a key growth area when it reported a 33 per cent increase in turnover to £977.2m.
Serco said it plans to extend its public sector involvement, when it reported 33 per cent increase in pre-tax profits to £22.4m in the six months to 30 June 2001. Reported turnover was £531.8m.
Source
The Facilities Business
