construction disputes consultancy Driver Group returned to profitability in the second quarter and, although that was not enough to offset the first quarter loss, it is on course to make a £500,000 profit in the full year.
Driver reported a 11% dip in revenues to £7.9m in the six months to March 2011, but this figure is more than the second half of the year to September 2010. Improved consultant utilisation has helped to improve gross margins. The underlying interim loss fell from £259,000 to £48,000.
Net debt was £603,000 at the end of March 2011. The balance sheet includes the Edinburgh office at a valuation of £1.8m and there is the possibility of selling it for £2.3m. Even without that disposal, available bank facilities total £1.99m.
The work that will take full year revenues to £17.6m has already been secured even though the Middle East remains tough. UK and Europe are trading well and new power and process sector work is being won. There are plenty of opportunities in Africa following the link-up with South Africa-based Evans & Peck, part of consultants WorleyParsons. Driverís partner is helping it to expand in sub-Saharan Africa. Six contracts have been won.
House broker WH Ireland forecasts doubled profit of £1m in 2011-12.The broker is even hopeful that Driver will start paying dividends again.
At 28.5p a share, Driver is valued at £7.52m. The shares are trading on 15 times 2010-11 earnings, falling to eight in 2011-12.
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