May Gurney's profit tumbles

Infrastructure services provider May Gurney has announced a 4% increase in revenue in the six months to 30 September.

The firm reported revenue of £339m in the first half of 2012, up from £325m over the same period last year.

However, the firm’s underlying pre-tax profit before amortisation dived £13.4m to £1.1m in the first half of 2012. This was partly affected by a £10m charge the firm had previously announced in response to the closure of its facilities services business.

May Gurney issued a profit warning on 6 September and announced the departure of its chief executive Phillip Fellowes-Prynne.

Margaret Ford, chair of May Gurney, said: “We continue to target resilient, maintenance-focused revenue streams for essential services by developing long-term relationships with our clients and local communities.

“Our strong commercial market positions are reflected by the fact that we have secured more than £314m of business in the first-half. Our forward order book has been maintained at £1.5bn, with a further £1.7bn in potential contract extensions, and our bidding pipeline stands at around £4bn.”

Shares in May Gurney fell more than 40% on the news of the profit warning on 6 September, to just over 130p, wiping almost £66m off the value of the company.

In the profit warning last month, the firm said it had “on-going difficulties” within its Scottish Utilities business as Scotia Gas Networks (SGN) looked to use more in-house labour. The firm subsequently announced plans to shed up to 250 jobs in Scotland as it looks to down size its business north of the Border.

The firm also said it was experiencing “significant exiting costs” as it ran down its Facilities Services division and had set-aside a £10m one-off charge to cover the costs. The firm also said it was facing some serious operational issues within two long-term MaGos waste and recycling contracts, after failing to meet targeted margins.