Lower overheads since the consolidation of the original three quantity surveyor acquisitions show that the acquisition strategy is working for Baqus.
These lower overheads are helping Baqus at a time when its margins are coming under pressure as rivals scrap for new business.
Revenues grew from a pro forma £3.68m to £3.98m in the six months to December 2008. However, pre-exceptional profits fell from £472,000 to £365,000. Without a fall in operating expenses from £971,000 to £760,000 the decline in profits would have been greater. Management is cutting further costs.
The latest period includes a contribution from Sworn King which was acquired during the summer. The integration will be completed in the next few months. Baqus already has one potential acquisition on the cards. Some owners are becoming more realistic about prices.
There is an interim dividend of 0.05p a share. Baqus has £1.55m in the bank and £949,000 of debt.
The order book is worth £8.2m, compared with £10.1m at the end of 2007. Some of the company’s fees are based on a percentage of construction costs. These costs are falling so the value of these contracts is also declining.
At 3.625p a share, up 0.625p on the day, Baqus is valued at £4.11m. The shares are trading on seven times forecast 2008-09 earnings.
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