Restructuring costs hit m&e contractor
M&E contractor T Clarke has announced its interim results for the six months to 30 June 2009.
Group revenue was down 12.4% to £95.8m (30 June 2008: £109.3m) and profit before taxation was down 43% to £3.1m (30 June 2008: £5.4m) after £1.4m of restructuring costs.
T Clarke chief executive Pat Stanborough commented: “This has been a tough six months for T. Clarke and we have not been immune from the recession. The Board has acted prudently in reducing overheads to align resource with current workload.
“Our order book remains strong, however, and enquiry levels are picking up especially in the regions. We have £170m of work in the Group’s pipeline, £75m of which is due for completion this year with £35m in London alone. We are still winning new business around the country and we are on the tender list for a significant amount of future work.”
The difficult trading conditions have led T Clarke to undertake a strategic review of group operations. The group is winding down operations at its Altrincham subsidiary, and is likely to sell its business near Birmingham.
In light of contract completions in its core London operations, the bulk of the reduction in headcount has been made in this area. As part of the restructuring programme, Barry DeFalco, managing director of UK regional operations, will be leaving the company on 30 September 2009.
Bad debts continue to give concern and a provision of £1.9m is carried forward as at 30 June 2009 of which a £0.8m net charge has impacted profit in the current period. In addition to the redundancies, T Clarke has also limited its apprentice intake.
"We have taken the decision to hold the interim dividend as a sign of our commitment to shareholders and our confidence in the future and longevity of this business,” said Stanborough. “Conditions are tough, but we have a strong balance sheet and the measures we have already taken to cut costs will provide an ample cushion should the downturn continue.
“This is a first class business and with 120 years of operational performance behind us, I am confident we will continue to be regarded as one of the best operators in the sector. We are in good physical and financial health and we are ready for an upturn in the economy.”
Shares were up 4.8% in early trading following the results announcement.
Electrical and Mechanical Contractor