Citywatch: Fighting Talk

It was, he suggested, a jungle out there. He pointed to a growing top line and a shrinking bottom line as evidence that some firms were putting in cut-throat, if not suicidal, bids, and everyone was suffering as a result. He said: “There’s more competition out there so prices are going down and some companies are bidding at or below cost. The problem is some are not then delivering a high quality service, which gives the profession a bad name.”

Sayer also suggested that public sector clients who go for the lowest bids should know better.

In the year to 30 June 2009 turnover at Baqus rose 2% to £7.9m and pre-tax profit fell nearly a third from an annualised figure of £1.1m to £739,000. As a result, the margin fell from 13% to 9%. Sayer said fee levels were down by anything between 10% and a third.

He is, though, still looking to buy other firms to give the AIM-listed consultant some extra muscle, although doesn’t expect to tie anything up this side of next Easter.

“I’m sitting down for more cups of coffee with prospective targets than I was this time last year,” he offered, hopefully.

Meanwhile, Barratt came in for some ribbing after a stock exchange and a national newspaper announcement urged subscribers to its £720m rights issue to ensure the postal strike didn’t stop them getting in their request for shares.

“Redrow is in the middle of a rights issue and hasn’t done the same thing,” pointed out one analyst. With £720m on the line as opposed to £150m at Redrow perhaps the nerves are justifiable.

Elsewhere social housing repair and maintenance group Mears issued an upbeat trading update that declared: “The demand for our services has never been stronger.” Well, that’s just rubbing people’s noses in it, isn’t it?