LONDON (Alliance News) - Mountfield Group PLC Tuesday said its pretax profit more than tripled in 2013 as the recovery that started in 2012 gathered pace, and the company said levels of new business enquiries in the first part of the current year are the highest it has seen since the financial crisis.
The company, which specializes in building and refurbishing data centres, reported a pretax profit of GBP765,339 for 2013, up from GBP218,505 in 2012, even though revenue declined to GBP12.3 million, from GBP13.6 million.
It said it was more selective about which contracts it took on, although it also experienced delayed starts in a few contracts. As a result of being more selective, its operating margin jumped to 6.9%, up from 1.4% in 2012, pushing up earnings.
It added that cash generated from operations was GBP979,000 and cash flow improved by GBP972,000, although it still won't pay a dividend for 2013 in order to protect its cash while trading is increasing. It said it is targeting paying a dividend in the medium-term.
Mountfield had swung to a trading profit in 2012, after three years of losses as its business was hard hit by the economic downturn that followed the financial crisis in 2008.
"The board's confidence as to the group's prospects is based upon the extent to which demand for construction services has recovered so strongly after the period during which the work that was available was usually offered at low or even negative margins. It is difficult to pinpoint the time when the change in demand became noticeable but with the benefit of hindsight we can see that the boost in business sentiment that accompanied the London Olympics in 2012 was transformed into a sense of confidence that has re-invigorated the construction sector as well as many other areas of business," the company said in a statement.
"This has been further evidenced during the first part of 2014 by a level of new business enquiries and invitations to tender in both of our divisions that has not been seen by the board since the middle of 2008. The board regards this as being a longer lasting improvement in sentiment and confidence," it said in its statement.
Mountfield shares were up 1.8% at 3.08 pence Tuesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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