05/11/2012

Shepherd Group achieves growth in turnover and underlying profit

In a performance which demonstrated the Group's resilience against a background of prolonged global economic uncertainty and very difficult market conditions, turnover increased by nearly 10% to £672m (2011: £611m).

The underlying operating profit level shows an increase of some 4% to £25m (2011: £24m).

The strength of the Group's cash position is shown in net cash of £89m at the year end (2011: £47m).

Each of the Group's Divisions - Shepherd Group Built Environment, Shepherd Group Engineering and Portakabin Group - achieved growth in turnover.

Portakabin Group
The result for Portakabin Hire division, which is important in the overall performance of the Group, showed a small increase in turnover and the European businesses achieved an overall increase in turnover and higher profit in each business area - France, Belgium and the Netherlands. These European business units now represent a consistent and significant contributor to profit, due in part to the strategic decision to focus primarily on the hire businesses in Belgium and Holland.

Shepherd Group Engineering
Both Portastor and Portasilo achieved increases in turnover and profit. The businesses are increasingly focusing on larger and more complex projects where better margins can be secured and on global activity which helps to mitigate the cyclical nature of key market sectors.

Shepherd Group Built Environment
Despite the challenging market conditions, Shepherd Construction and Shepherd Engineering Services (SES) achieved growth in turnover while continuing to develop their reputation as suppliers of large and technically complex projects, amply demonstrated by projects at Drax and at Pirbright.

Shepherd FM continues to make good progress in growing contracted revenues and Shepherd Homes achieved increased turnover and a breakeven position, an encouraging performance given that market conditions remain very difficult.

Property development activities, now being delivered within the Shepherd Aligned concept, have seen the results of Group actions to dispose of the current stock. The primary disposal during the year was of the Marine House project in Portsmouth for £20m and the sale of the Market House, Maidenhead project for £32m which occurred after the year end.

Commenting on the results, the Group chairman, Alan Fletcher said: "Strong management aligned with quality products and services have ensured that the Group continues to make steady progress against a very challenging market backdrop, driving the business for profit and value growth for the shareholders. The completion of our business restructuring and the recruitment of new senior executive management continue to give confidence in the underlying potential of the Group."