ISG PLC Trading Update (4717H)

TIDMISG

RNS Number : 4717H

ISG PLC

01 December 2015

ISG plc

Trading Update

ISG plc ("ISG" or the "Group"), the international construction services group, today issues an update on trading for the period 1 July to 30 November 2015, ahead of its AGM which will be held on Friday 4 December.

The Board is pleased to announce that since the start of the financial year the Group has seen good trading conditions for the majority of our businesses with a particularly strong performance by our UK Fit Out and Engineering Services division. Trading in UK Construction however has been disappointing. We anticipate the results for the full year being in line with the Board's expectations for all divisions except UK Construction. The Board also expects a greater second half weighting to this year's results.

We continue to work on the recovery plan for UK Construction. Despite the many positive steps we have taken, we have continued to experience disappointing project outcomes on some older contracts. In addition, with margin and risk control remaining our priority rather than volume and some customers delaying the start on site of their projects, volumes this year will be below our expectations with profit deferred to later periods. As a consequence, this division will be loss making this year and will impact the Group results by up to GBP5m. The Board is resolute in its ambition to refocus this division on core sectors, regions and skills.

Work on closing out the final projects on discontinued activities is proceeding in line with our expectations. We expect all projects to have reached practical completion by December 2015 and for the vast majority of outstanding commercial issues to have been settled by the financial year end.

At the end of October, our total order book had increased by 12% to GBP1,130m (October 2014: GBP1,010m) of which GBP840m (October 2014: GBP770m) is for delivery in the current year. The balance sheet remains robust and we anticipate a net cash position in excess of GBP50.0m as at 31 December 2015 (2014: GBP38.3m).

As mentioned in our preliminary results, the Board expects to resume payment of an interim dividend and therefore, in the absence of further unforeseen circumstances, would expect to pay an interim dividend of 3.8p (2015:0p) at the half year.

In our UK Fit Out and Engineering Services division, we are currently working on six major (>GBP20m) London office fit out schemes with a combined value of over GBP300m. Our engineering services offer continues to grow as we have secured further data center contracts in Continental Europe and the UK.

Our UK Retail business continues to experience growth and opportunity with its retail banking clients, whilst activity levels with food and high street retailing clients remains stable. As market leader, it is benefitting from being in the forefront of rapid innovation in retail formats.

In respect of our overseas businesses, overall we are seeing performance in line with our expectations, with robust order books and pipelines across our core sectors of office, retail, hospitality and engineering services and with a normal seasonal second half bias.

Our ongoing focus on specialising in key market sectors provides the Group with a strong platform for future growth from which to continue to take advantage of new market opportunities.

Shareholders will next be updated on the Group interim results for the six months to 31 December 2015 on 8 March 2016.

1 December 2015

 
ISG plc 
David Lawther, Chief Executive Officer     020 7392 5250 
Jonathan Houlton, Group Finance Director 
 
Instinctif 
Matthew Smallwood, Helen Tarbet            020 7457 2020 
 
Numis Securities Ltd 
Nominated Advisor: Michael Meade           020 7260 1000 
Corporate Broking: Ben Stoop 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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December 01, 2015 02:00 ET (07:00 GMT)