11th Nov 2009 07:00
North Midland Construction plc
Interim Management Statement
11 November 2009
North Midland Construction PLC (the "Group") is today issuing its Interim Management Statement covering the period 1 July 2009 to 30 September 2009, as required by the UK Listing Authority's Disclosure and Transparency Rules.
The current economic climate continues to remain extremely challenging with reduced tendering opportunities, particularly from the private sector, and very tight margins. Revenue is currently 30% below budget, but the year end profit is expected to achieve the current forecast, before making any provision for the recent OFT fine of £1.5 million. Legal advice is currently being sought with regard to the OFT ruling and further announcements will be made in due course.
North Midland Building Limited has recently secured several new contracts, providing a workload for 2010 of £15million. Revenue for 2009 will be circa £14million, with profitability significantly below the 2008 result.
Nomenca Limited is continuing to perform well and two new frameworks in the Water Industry have recently been won. Both forecasted revenue and profit will fall marginally below the previous year.
The Highways division has recently been successful in bidding for several public sector contracts and a framework for Liverpool City Council. Both revenue and profit will be reduced from the previous year.
Both problematical contracts for the Civil Engineering division, referred to in previous statements, have now been concluded. Reduced expenditure within the industry is affecting the division and revenue will be below that of last year. Profitability, however, will be similar. Resolution of the contract at Halifax has now been achieved and this will result in a cash in-flow into the company.
The Utilities division is performing well and is experiencing increasing revenues, as the South Yorkshire Digital region contract is now fully underway. A profit in excess of the previous year will be delivered.
As a result of the resolution of both the Fiddlers Ferry, Ferrybridge and Halifax contracts, cash flow has improved and the Group is currently operating well within its facilities.
Restructuring and cost reduction measures have been implemented across the Group to adjust for current market conditions. The Group's marketing strategy has also been modified, due to the decline in private sector demand.
The current order book for 2010 currently stands at £64 million and this, coupled with the AMP5 framework for Severn Trent Water, due to commence on 1 April 2010, and the South Yorkshire Digital contract gives a degree of confidence for next year.
Contacts:-
North Midland Construction PLC 01623 515008
Robert Moyle, Chairman
Mike Garratt, Finance Director
Brewin Dolphin Investment Banking 0845 270 8610
Andrew Emmott
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