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19 Nov 2012 07:00
North Midland Construction PLC ("the Group")
19 November 2012
Interim Management Statement
The Group is today issuing its Interim Management Statement covering the period from 1 July 2012 to 30 September 2012, as required by the UK Listing Authority's Disclosure and Transparency Rules.
UK construction industry output has slumped to its lowest level for more than 13 years, with 2012 third quarter output 11.3% down on last year. This decline is having an adverse effect on certain sectors of the Group's business and it is predicted that year end Group revenue and profit will be slightly below management expectations. The Group has delivered a small profit before tax for the quarter, on a revenue of £38.0 million. Revenue and profitability continue to be affected by a reduction in public expenditure and a major downturn in activity within the telecommunications sector.
Losses within the Building and Civil Engineering division have been significantly reduced and the major loss-making contract will be completed in early 2013. The prosecution of the contractual claim continues. New framework contracts have been secured within the power sector.
Nomenca Limited continues to perform well and is delivering in line with expectation. The year end result will be in excess of that for 2011.
NMCNomenca (the Group's integrated water business) is performing ahead of management expectations and the division's profit for the year is anticipated to surpass that of 2011. The E5 consortium continues to deliver and prospects are looking favourable.
The Highways division has been affected by delays in the commencement of secured contracts and public expenditure cutbacks, most particularly on its existing frameworks. The division remains profitable, but both profit and revenue will be below that of the previous year.
The Utilities division has been severely affected by a significant downturn in expenditure by the telecommunications companies. The division has re-organised and downsized to accord with current market conditions. Losses continue to be incurred, but on a reduced scale.
Cash collection is becoming increasingly difficult, but nevertheless has improved over the last quarter. The Group continues to operate well within its bank facilities.
The current Group order book for 2013 stands at £90 million compared with £70 million at the same time last year.
Contacts:-
North Midland Construction PLC 01623 515008
Robert Moyle, Chairman
Mike Garratt, Finance Director
N + 1 Singer 0113 2410126
Richard Lindley
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