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Fountains

  • BY: Andrew Hore |
  • POSTED: 18/05/2009 |

Fountains reported improved interim profits before the costs of its bid talks and a board restructuring.

The vegetation management and forestry services business has an order book is worth 102m, which is slightly down on one year ago but higher than the 96m reported in February 2009. The order book is spread over a number of years. Around 17m of the order book is for 2009 and more than 23m for 2010.

A 5m a year contract with the British Waterways Board has helped to keep the figure high. This contract lasts for three years and can be renewed for another two.

Revenues improved from 20.7m to 21.1m in the six months to March 2009. One-off bid and board change costs were 372,000. There will be more bid costs in the second half.

After those costs the profit fell from 650,000 to 388,000 but there was an underlying improvement. This is a big improvement on the loss in the second half of last year.

The improvement came in the contracting side of the business with the forestry contracting services division making a lower contribution even though revenues grew.

Net cash has improved to 513,000 over the six months to March 2009. There is also 6.1m of overdraft and credit facilities available. The interim dividend has been increased from 1.1p to 1.25p a share.

Management hopes to win some more large contracts in the near future.

Shares in Fountains jumped 9p to 64p each, which values the company at 6.4m. Bid talks, which were announced in November 2008, continue. The share price is below the level it was when the talks were announced. More than one bidder is interested.

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