Revenue from continuing operations in the six months to 31 December 2011 was steady at £623m (2010: £621m) but adjusted pre-tax profit was down form £5.4m last time to £3.6m.
ISG’s UK Construction division saw a small decline in revenue to £227m (2010: £237m) but margins remained under pressure and “residual contract issues” in the southwest continued to impact profits. Operating profits for the period were thus eroded to £0.1m (2010: £2.0m).
The construction order book at 31 December 2011 was £359m (2010: £408m).
Operating profit was also down in the food retail division, from £2.3m last time to £1.3m this time, on revenue marginally ahead at £110m (2010: £107m). “With confidence across the sector in the UK generally lower and with an ongoing pressure on margins we believe that results in this business will continue to be affected in the second half,” the company warned.
Revenue from the UK fitout division for the first half fell 9% to £176.6m (2010: £193.3m) but operating profit was up from £3.3m to £3.4m.
Overseas operations grew during the period and now account for 27% of group trading operating profit.
In mainland Europe, revenues grew 28% to £53m (2010: £41m) and operating profit rose to £1.3m (2010: £0.1m).
Revenues from Asia were up 45% to £47m (2010: £33m). Operating profit was £0.7m (2010: £0.2m).
In the Middle East, revenues were steady at £10m (2010: £10m) but delays to the start of work in Abu Dhabi led to a loss of £0.3m (2010 profit: £0.2m).
CEO David Lawther said: "In the UK, we are pleased to have maintained our market leading positions and further deepened our relationships with blue chip customers in a competitive market. Our overseas businesses are continuing to grow strongly, benefiting from these relationships. We have completed a number of high profile projects further enhancing our reputation overseas.
"Our market leadership in the corporate office fit out, food retail and retail fit out sectors continues to deliver repeat business and a reliable order book, which will enable us to benefit from any upturn particularly in the UK. The slowdown in the UK retail sector has affected our short term expectations of our retail business. Overseas, we will continue to invest in our growth organically and, as opportunities arise, in bolt-on acquisitions. We remain confident that our resilience and our clear strategy will generate increased value for our shareholders."
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