7th Jun 2016 07:30
LONDON (Alliance News) - Construction company Mountfield Group PLC on Tuesday said it made "significant progress" in 2015, swinging to profit after having transformed one of its businesses which had been to blame for a GBP3.9 million impairment in 2014.
Shares in Mountfield were up 35% at 1.87 pence on Tuesday.
Mountfield posted pretax profit of GBP177,177 for the year ended December 31, compared with the GBP3.9 million loss it reported the year earlier, after no impairment was incurred for 2015, compared to the GBP3.9 million impairment of goodwill in 2014.
Mountfield is engaged in two main types of business: Mountfield Building Group Ltd (MBG), which had been a specialist in the installation of data centres; and Connaught Access Flooring Ltd (CAF), which installs flooring to commercial offices and data centre installations.
In 2014, Mountfield had incurred the large goodwill impairment due to "the overall poor performance of MBG when viewed over the last four years", following which Mountfield said it would review the business.
Since then, Mountfield said it has transformed MBG into a construction company with a "substantially reduced cost structure and a business strategy that limited its choice of contracts to those where consistent margins are paired with low risk". Mountfield said, following this restructuring, MBG is now trading profitably.
Mountfield said its MBG company has "excellent prospects" and has secured works totalling GBP3.0 million so far in 2016.
During the year, Mountfield group revenue rose to GBP13.0 million from GBP11.8 million, and Mountfield said its contract in its CAF division to install new flooring at the City of London headquarters is "likely on completion to have produced revenue of GBP4.0 million in 2015".
Mountfield said the outlook for the flooring unit looked "strong" for 2016 and 2017. Based on the volume of high-quality tenders for large commercial flooring contracts combined with expected developments into the supply and installation of new products, Mountfield said the prospects for CAF look increasingly bright for a number of years.
Elsewhere, Mountfield said it will propose a resolution at its annual general meeting on June 29 to give the company and the directors authority to convert all the remaining loan notes in the company into founder shares of GBP1.00 each. Mounfield said it has taken advice from specialist advisors and is satisfied this will not have an adverse effect on the company.
By Hannah Boland; [email protected]; @Hannaheboland
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