LONDON (Alliance News) - Formation Group PLC on Thursday said its pretax profit came in more than five times higher in the first half than a year earlier, and said its budgeted profit for its full year is "achievable".
The property development and project management company reported a pretax profit of GBP1.4 million for the six months ended February 29, up from GBP266,000 for the same period a year earlier, despite a dip in revenue to GBP10.2 million from GBP10.8 million.
In light of the lower revenue, along with increased administration expenses, Formation recorded an operating loss for the period of GBP84,000 from a profit of GBP266,000 a year earlier. However, this was offset by a huge gain in finance income, which totalled GBP1.4 million. There was no finance income a year earlier.
The increase in finance income largely came from a GBP1.0 million profit on discontinued operations, which formation said came from a positive write back relating to loans secured on investment properties at FG Bradford Ltd and FG Bristol Ltd when they were disposed of in October.
Formation added that its Formation Homes (London) Ltd business had almost completed development at a site in Iverson Road, London, with profit forecast within the second half of the financial year to the end of August.
"The group continues to maintain its recent impressive trend of turnover and profitability and is confident that the current year budgeted profit is achievable," said Non-Executive Chairman William O'Dea.
"This confidence is enhanced by the achievement of the projected profits on the Norwich House profit share and the increasing order book on project management contracts. Furthermore, with the expected successful completion of the 159-161 Iverson Road development the group is confident that it can continue to source lucrative development opportunities," O'Dea added.
Shares in Formation were up 9.1% at 6.28 pence on Thursday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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