30th Sep 2014 08:20
LONDON (Alliance News) - Shares in Mountfield Group PLC dropped heavily in early trade on Tuesday after the construction company said pretax profit all but evaporated in the recent half-year, despite a rise in revenue, as its results were hit by a major contract with low margins.
Shares in the company were down 31% to 1.70 pence in early trade, making it the worst performer on the AIM All-Share.
Mountfield's pretax profit in the six months to June 30 was GBP4,391, down from GBP235,835 a year earlier. Revenue in the period was up to GBP5.6 million from GBP5.2 million a year earlier.
The company said the fall in profit was the result of the company receiving less payment than anticipated on a major contract, along with an increase in staff numbers in the period in order to increase the number of contracts on which the company could work. Margins in the first half were down to 4.3% from 18.6% a year earlier.
The group said it remains confident on its prospects, saying the shift in strategy over the period, to focus on fit-out and building fabric repair work, is producing additional work.
Chief Executive Officer Graham Read said the company is in talks on a number of contracts which, if signed, would mean it will hit its expectations for the year.
By Sam Unsted; [email protected]; @SamUAtAlliance
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