LONDON (Alliance News) - Property development and project management business Formation Group PLC Friday said its losses widened in the first half, as its cost of sales ballooned and gross profit margin narrowed.
The company, which operates from offices in Hackney, east London, posted pretax losses of GBP173,000 for the six months ended February 28, compared with a GBP103,000 loss a year earlier. This came after an operating loss from continuing operations more than doubled to GBP145,000, compared with a GBP72,000 loss a year earlier.
Revenue rose to GBP3.2 million from GBP2.4 million, after it completed two property projects in London and started four new developments including a scheme on Finchley Road, north London. The firm said it expects to start another three or four projects in the second half of the current financial year.
However, cost of sales jumped 45% to GBP3.0 million from GBP2.1 million. The company said the decrease in gross profit margin in the period was largely due to compensation issues on one of the recently managed projects.
Financially, the firm said it had GBP78,000 in cash, down from GBP240,000 a year earlier. Formation said it recognises the cash constraints of the business and continues to closely monitor and manage its working capital position.
The company said it will not pay an interim dividend but will review this position for the full year to August 31.
Formation Group shares were untraded Friday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
