LONDON (Alliance News) - Fulcrum Utility Services PLC Tuesday reported its first ever annual pretax profit as a restructuring of the business that stripped out costs paid off and offset a decline in revenue, and it said it is confident about the current financial year after putting a "profitable" business model in place.
The energy and utility services provider reported a pretax profit of GBP606,000 for the year to March 31, compared with a loss of GBP4.5 million a year earlier, even though revenue fell to GBP33.7 million from GBP38.3 million.
The Sheffield-based company, which provides services like installing new gas pipelines and electricity connections, has spent a couple of years trying to turn the business around, cutting costs, scaling back management, selling some assets, revamping the culture of its sales force towards more profitable business opportunities, and increasing its presence in the housing market.
That drive meant its gross margin improved to 28.8% in the last financial year, from 24.8% a year earlier, while administrative expenses were cut to GBP8.6 million from GBP10.2 million. It said it fixed cost base and overheads have now been cut to GBP11 million from GBP17 million over the past two years.
As a result of the improvement and reflecting its confidence going forward, it is going to pay a maiden full-year dividend of 0.4 pence a share.
"The board intends to introduce a progressive dividend policy, while maintaining dividend cover at a prudent level," Chairman Phil Holder said.
"Our targeted growth strategy is focused on winning major projects, enhancing key account relationships through improved levels of service and increasing penetration in the housing market. We will build our multi-utility capability and will have the first in-house dual fuel teams fully operational in 2015/16. This will be a key differentiator when combined with our nationwide customer service led offering," Chief Executive Martin Donnachie said.
The company said it has entered the current financial year with a "solid" order book "underpinned by favourable market dynamics".
Still, Fulcrum shares were down 0.9% at 14.00 pence Tuesday morning. The stock has risen 84% so far in 2015 and is up 91% over the past 12 months.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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