Investor Relations

Chairmans Statement August 2010

It is gratifying to report a significantly improved performance for the half year with profitability increased by 49% to £2.04 million on revenue increased by 9.3% at £77.90 million.

The parent company delivered enhanced results with profitability rising to £1.80 million from £0.98 million on revenue increased by 6.07% at £50.30 million.  All divisions were profitable, with an improved performance from the Utilities division on the back of significantly increased volumes from the telecommunications companies, driven by the demand for increased broadband capability.  The Civil Engineering division benefited from the commencement of the AMP5 programme for the water industry and the resolution of various schemes on the Minworth Project for Severn Trent Water.  In an extremely competitive environment, the Highways division delivered a similar result to that of the previous year.

North Midland Building continues to be severely affected by the downturn in demand and a nominal return was delivered, albeit on a revenue increased five fold.  Tender opportunities are on the increase, but margins remain extremely competitive and further orders are required to deliver the forecasted result for the year.

Nomenca, the Mechanical & Electrical Engineering subsidiary, has suffered from the slow commencement of the AMP5 programme by the water industry.  Profitability reduced by 20.3% to £235,000 on revenue reduced by 14.3% at £18.0 million.  The lead-in period for their works are much longer than for the Civil Engineering division and it is unlikely that the forecast for both revenue and profit will be achieved this year.  However, the prospects for the ensuing years are very promising.

Secured Group revenue for this financial year currently stands at £170 million, compared with market expectations of £184 million.  There is a need to secure further orders, most particularly in the non-water elements of the Civil Engineering division and the Building division.  The market place remains extremely competitive, but the Group is well placed with its wide range of capabilities across the sector to deliver.

During the half year there was a cash outflow of £5.61 million, due to increased levels of work in progress, particularly in the Utilities division.  The Group, however, is trading well within its credit facilities.

Brian Evans has decided to retire at the end of the financial year and will thus be resigning from the PLC Board.  As the founder of the Building subsidiary, he is to be thanked and congratulated on the success and growth of that company and his overall contribution to the Group.

The Directors remain confident that the market expectations for the full year will be achieved and the level of orders already secured for 2011 shows promise.  On this basis, in order to maintain the return to shareholders, an interim dividend of 2.5p per share, which will be paid on 1 October 2010 to the shareholders on the register on 10 September 2010, is recommended by the Board.

R Moyle Chairman August 2010 North Midland Construction PLC

Home | About Us | Our Business | Management Systems | CSR | Carbon Footprint | Investor Relations| Careers | Contact Us

© North Midland Construction Plc - Registered in England No. 425188 - Registered Office: Nunn Close, The County Estate, Huthwaite, Sutton-in-Ashfield, Nottinghamshire, NG17 2HW