News blog
Driver Group
- BY: Andrew Hore |
- POSTED: 19/01/2011 |
Driver Group fell into loss in the year to September 2010 but cost savings helped to reduce the loss in the second half.
The construction dispute resolution and advisory services provider reported a pre-exceptional operating loss of £414,000, compared with a profit of £1.3m the previous year. The first half loss was £252,000, so the second half loss was £162,000.
This was despite the continued downward trend in revenues. The second half revenues were 14% lower than the first half revenues. Full year revenues fell from £20.5m to £16.4m. The main fall in revenues was in the UK but the Middle East also made a lower contribution. The spread of advisory work across the life of projects is helping Driver to generate revenues even when there are fewer new construction projects.
On top of the operating loss there are severance costs for reducing employee numbers, as well as a £122,000 write-down on the Edinburgh office eventually sold for £600,000.
The pre-tax loss was £809,000, compared with a profit of £1.05m. Start-up costs in new territories added to costs in the period.
Driver has decided not to pay a dividend in order to conserve cash. Net debt was £459,000 at the end of September 2010.
Fee earners have been cut from 146 to 110 over the year. Remaining staff have taken pay cuts and this will save £500,000 in a full year. Two non-executive directors are leaving and Steve Driver will switch from executive chairman to non-executive chairman. A new chairman will be appointed in next few months.
Growth is set to come from eastern Europe and Africa. There are also growth areas in the UK, including energy and nuclear, while transport-related revenues are holding up.
A new office has been opened in Qatar and Driver will be in a strong position to pick up World Cup-related work.
Driver has already secured £9.29m of work out of forecast revenues of £17.6m for 2010-11. The UK is continuing to decline in importance with the rest of Europe a greater percentage of work than before.
House broker WH Ireland expects Driver to return to profit in the year to September 2011. A £500,000 profit puts the shares on a prospective multiple of just over 11.
At 21.5p a share, down 5p, Driver is valued at £5.67m.
Download the January edition of AIM Journal at http://www.hubinvest.com/AIMPDFJanuary2011_16.pdf
© 2024 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- Browse by issue
- All issues
- Popular tags
- All tags
- AIM Micro feeds
Keep up to date with articles published at AIMMicro.com. Subscribe to AIM Micro RSS Feeds
|