LONDON (Alliance News) - Shares in gas and electricity services firm Bilby PLC dropped a fifth Tuesday after interim profit was hit by lower revenue.
The dividend was kept unchanged.
For the six months ended September, pretax profit narrowed sharply to GBP1.4 million from GBP2.4 million the year prior. This was after revenue fell 5.7% to GBP36.4 million from GBP38.6 million the year before.
Shares in Bilby were 22% lower at 71.00 pence on Tuesday.
The weaker performance was "principally" due to the firm stopping its building services work for the UK Ministry of Defence in order to "focus on more profitable contracts". Performance was also hurt by a delay in gas installation programmes.
Despite this, Bilby was "pleased to secure a number of new long-term contracts which enhance the group's future revenue visibility." Nonetheless, "full revenue and earnings benefits from these contracts will not be achieved until the next financial year."
"This has been an important period for the group," Bilby Chief Executive Officer David Ellingham said. "I am pleased that we continued our operational momentum from last year into the first half of this year, expanding our blue-chip customer base and offering additional services to Bilby customers."
Bilby still expect revenue and earnings before interest, taxes, depreciation and amortisation to "exceed" that report the year prior. For the year ended March, Bilby generated Ebitda of GBP6.3 million on revenue of GBP78.8 million. Pretax profit stood at GBP4.3 million.
"Since the period end we are pleased to have pushed forward with our buy and build strategy and have acquired Dunham," Ellingham added. "The acquisition will see the group broaden its customer base and strengthen its presence in its core markets of London and the South East."
In late November, Bilby bought electrical services firm R Dunham (UK) Ltd for GBP1.4 million in cash and 250,000 Bilby shares.
Bilby Chairman Sangita Shah said: "The market that Bilby operates in now has an unswerving focus on compliance and safety. Throughout the UK, councils are reviewing their properties to ensure that residents live in the safest possible environments. Alongside this, the government has pledged to build 300,000 homes a year, which will include modern services that are fully compliant."
Bilby proposed a 0.5 pence per share interim dividend, unchanged on the year prior.
"Given these trends and initiatives," Shah continued, "there continues to be significant opportunities for the facility management and building services that Bilby offers. Given Bilby's position in the market and its reputation, I am confident that Bilby is ideally placed to capitalise on future opportunities."
