LONDON (Alliance News) - Driver Group PLC Tuesday said its first-half pretax profit slipped fell by more than a fifth despite an increase in revenue, as the company looked to establish its new offices in Australia and Hong Kong, and to strengthen its business in Singapore.
In a statement, Driver Group said it made a GBP1.1 million pretax profit in the six months ended March 31, compared with GBP1.4 million a year earlier. Revenue increased to GBP19.9 million, from GBP18.5 million, due to growth across Driver Group's regions, with the exceptions of Africa and America. However, cost of sales rose by even more, to GBP15.3 million from GBP13.6 million, while administrative expenses were broadly flat at GBP3.6 million.
Driver Group said the fall in pretax profit is in line with management expectations and is due to cost increases incurred as part of its investment programme.
"I am very pleased to report that the Asia Pacific region is developing well and was ahead of expectations in the first half of the year. The Middle East region was again a strong contributor, trading better than anticipated in the period," Non-Executive Chairman Alan McClue said in a statement.
"These regions offset the slower start we had to the year in Africa [...] and in America, where the continued investment has not yet generated the returns we were initially targeting from this region and certain measures have subsequently been taken to remedy the performance from the American business. The European region was helped by a better than anticipated performance in the project services business which compensated for a reduction in revenue in the UK's dispute and expert witness services. The offices in mainland Europe (Germany and Netherlands) were in line with our expectations," McClue said.
"The group's budgets planned for a better performance in the second half of the year as the investments in new offices carried through from 2013 start to deliver benefits in the second half. A recent review of the regions continues to support the view that this is the case and this is also supported by the level of secured commissions we have obtained and our current pipeline of opportunities," McClue added.
Driver increased its interim dividend to 0.6 pence a share, compared with 0.5 pence a year earlier, maintaining its progressive dividend policy.
Driver Group shares were Tuesday quoted at 88.72 pence, down 6.1%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Driver Grp (DRV)