Baqus profit down 23% as margins cut

Consultant Baqus has reported a 23% fall in pre-tax profit in its half-year results but said it is “cautiously optimistic” about the year ahead.

The firm, which floated on the stock market 15 months ago, posted profit before tax of £365,000 for the six months to 31 December 2008, compared with £472,000 the previous year. Turnover rose by 8% to £3.98m, up from £3.68m in 2007.

The firm said its order book had slipped to £8.2m, down 23% from £10.1m in December 2007, and that it had been forced to cut margins to win work.

Group chairman Roger Knowles said: “We are still enjoying a good level of enquiries but competition for work is fierce and it has been necessary to reduce margins to secure work. This has meant that cost-cutting measures have been introduced and cost control has been more vigorous to ensure that the work remains profitable.”

The group, which comprises founding firms Boxall Sayer, Fletcher McNeill and Denley King and August purchase Sworn King, said it would stick to its policy of growth by acquisition and was at an “advanced stage” of negotiations to buy another company.

Knowles added: “Although the intake of orders has slowed, we are seeing a good flow of enquiries from our clients and I am confident that we will be successful in converting a number of these leads into firm orders at sensible margins. Against this background, we remain cautiously optimistic that we will achieve our objectives for this year and beyond.”