Driver Group expects strong pre-tax profits despite construction industry woes
A professional services group listed in Lancashire has said it expected to post annual profit 'comfortably ahead' of current market expectations. Driver Group enjoyed a strong second half of its current financial year, despite a sluggish construction scene in the UK.
Established in 1978, the Driver Group provides engineering and construction-focused services to a global client base. The group, the UK wing of which is known as Driver Trett, employs over 450 qualified and experienced consultants available through their local offices. Now, thanks to booming demand from its world-wide clients, the Lancashire listed construction consultancy is expecting pre-tax profits to be "comfortably ahead" of market expectations after enjoying a strong end to the year.
Earlier in 2018, Driver Group agreed to a £1.65 million sale and leaseback agreement for its Haslingden offices, which seems to have buoyed its position. Meanwhile the freehold property interest of the company's central administration site was bought by Jetglobal, with the sale giving rise to a small profit. These measures seem to have insulated Driver from a difficult period in the UK market.
The news comes at a time when the British construction sector has endured a tumultuous period in light of Brexit pressures, and an economy plagued by sluggish productivity. This has seen Carillion collapse, despite obtaining a sequence of lucrative public sector contracts throughout 2017, Capita witness its share value slump by 43%, and the beleaguered Interserve grapples with poor trading and climbing costs, among a multitude of other construction firms battling bad results.
However, a recent report from construction consultancy Mace claimed that should the UK’s construction industry modernise practices, it could create an estimated £40 billion export scene, as companies around the world would seek to tap Britain’s best practices. Beyond simply surviving a turbulent economy, then, the Driver Group already seems to be illustrating this potential, enjoying a strong second half of 2018 domestically, but also yielding "exceptionally good" showings in Kuwait, Qatar and Singapore.
According to a recent statement from the firm, overall, the group has achieved "significantly enhanced utilisation levels" of 80% for 2017/18, while there remains a "vigorous and vigilant focus on the management of overhead". In this case, the consultancy expects it will report underlying pre-tax profits well ahead of its current market expectations at approximately £3.8 million. At the same time, Driver has a net cash position of £6.9 million compared to a net debt position of £200,000 from the same time last year.
