6th Oct 2015 08:08
LONDON (Alliance News) - Construction and engineering consultancy Driver Group PLC on Tuesday said it has seen robust trading in the second half of its financial year to the end of September, boosted by organic growth and by the acquisition of UK construction management business Initiate Consulting in December 2014.
Driver said revenue from its Africa, Middle East and Asia region rose 30% in the second half year-on-year, as investments in the business started to flow through from June onwards. The good growth has been driven by the United Arab Emirates, South Africa and by its oil and gas division in Singapore.
Construction and infrastructure spending levels remain strong in the Middle East, the company said, and it expects this to grow further across the AMEA region in coming years. While the downturn in oil and gas industries has started to hit construction spending in the region to an extent, Driver said it remains confident it will not face a major impact in the short to medium term.
Revenue from Driver's Americas and Europe business, excluding the Initiate business, also was strong, with organic growth around 9% in the second half. Driver expects the good performance to continue as the company strengthens and builds its customer base in mainland Europe.
Initiate has traded broadly in line with the company's expectations in the UK, though revenue was hit in the fourth quarter on its account with Network Rail, the rail network operator, due to changes to the procurement of services. Still, the group remains confident on Initiate's outlook and expects to start winning contracts for the company in the Middle East in due course.
The group said its underlying operating profit for the year to the end of September will be in line with market expectations, though it will have to book GBP450,000 in charges related to the closure of the SSI steelworks in Redcar and due to adverse foreign exchange movements which have hit its Africa, Middle East and Asia business.
Shares in Driver were up 3.0% to 69.00 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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