Construction market drags down Driver - Crain's Manchester Business

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Steve Driver, chairman, Driver Group

8:36 am, June 22, 2010
Construction market drags down Driver

By Michael Fahy

Rossendale-based construction consultant Driver Group reversed an interim profit of £1.2m last year into a £440,000 loss as its sales slipped by 21 per cent to £8.84m in the six months to March 31.

The company blamed the global economic downturn for its performance, and said the woeful state of the UK construction market particularly hampered its performance. UK revenues in its Driver Consult business were 32 per cent lower than the corresponding period last year at £3.37m. Revenues in its CMC business were down 18 per cent and its Middle East division reported a 13 per cent drop.

However, it added that its international business helped to offset its UK performance and added that its current trading was showing signs that its core markets were stabilizing.

"Results for the first half of the financial year show the full impact of the economic downturn on trading, especially within the UK although our actions to reduce headcount earlier in the year have partially mitigated the effect,” said group chairman Steve Driver. “Encouragingly, the revenue trend when compared with the second half of last financial year points to a stabilization”.

He said that the firm's three-year plan involved concentrating on international expansion and on broadening the range of project management services it offers to the industrial, power rand energy sectors. It is to invest £1m in both areas, which will include opening new operations in Africa, the UAE and in Qatar, and has already secured new contracts in the latter. It has appointed two senior directors to oversee new market openings.

He added that its board had been “impressed” with its early efforts to build new income streams and that trading in its new financial year was “in line with management and market expectations.

“The current financial year is one of strategic investment,” he said. “We are encouraged with progress to date and expect the benefits to become increasingly evident in the next financial year and beyond."

Driver said that the amount of net funds at the firm's disposal had increased to £2.65m (2009:£1.95m). However, net assets dropped to £6.6m by March 31 (2009: £7.6m). It was also forced to declare an impairment charge of £122,000 on a freehold property in Edinburgh, which it has since sold for £600,000.

The firm said that in view of its lossmaking position, it would not be declaring a dividend.

COMMENTS? mfahy@crain.com