ISG has today reported a loss of £27.8m for the year ending 30 June 2015 following a difficult start to the year and the restructuring of its UK construction division which saw its Tonbridge office close.
ISG said it made a pre-tax loss of £12.9 million in the year to the end of June, compared to a £6.8 million profit the previous year, attributing £19.9 million in costs related to the restructuring of its construction business and losses made on contracts the division secured between 2012 and 2013.
The UK construction division made an operating loss of £18.1 million for the year on £446 million revenues from continuing operations. The year prior, it made a £2.5m profit from revenues of £436 million.
Despite this, the firm remains confident the worst is behind them as conditions significantly improved in the second half of the year, with particularly good trading within its fit-out, engineering services and retail businesses. In support of their claims, ISG staff numbers rose from 838 to 898 despite their woes.
ISG’s Chief Executive, David Lawther, said: “It has taken two years to work through the legacy of poor contracts taken on in the recession. This has been a costly exercise in which we have closed our Tonbridge office, announced the closure of our loss-making London Exclusive Residential activities, and recognised significant losses on a small number of projects that are now complete. Margins on new work won over the past two years have been on significantly improved contracted terms and tightened control as we have improved management focus on repeat, framework and lower risk contracts. We believe the poor performance and painful restructuring of the UK Construction division are now behind us.”
"We believe that the poor performance and painful restructuring of the UK Construction division is now behind us, and with the outlook for most of our key markets remaining strong, we expect a much improved overall performance for the Group in the year ahead.
“Looking ahead, the London office fit out market remains strong and, in the short-term, will be focused on medium-sized and refurbishment projects, whilst in the medium term, we will see larger-scale projects feature more prominently again. The UK’s economy is stable and we expect further opportunity in other major UK cities.
“With strengthened management, a simplified structure, a focus on repeat business and more favourable market conditions, a significant improvement in the performance of our UK Construction division is expected. “Overall, we expect a much improved performance in the year ahead.”