ISG returns to profit and eyes US expansion
ISG has returned to profitability since US investment group Cathexis bought the ailing contractor in February 2016 for £84m.
Under the control of new chief executive Paul Cossell, the contractor is now plotting to stretch its horizons to North America using existing clients as an entry.
During the 10 months to December 2016, ISG achieved revenue of over £1.3bn delivering a pre-tax profit of £4.8m.
This equated to an underlying profit before tax of £25.5m, excluding amortisation of intangible assets of £11.7m, acquisition expenses of £1m, restructuring costs of £4.7m and closure costs of £3.3m.
Cossell said: “Our forward order book is strong at £1bn and populated with high-quality work from repeat clients in our target sectors.
“In 2017, we will enter the US market, which is the base for many of our international repeat clients. Also in the US, we have a pipeline of developer-led schemes.
“We also expect to increase our presence of the burgeoning technology, science and health sector where our skillset and reputation is in high demand.”
| ISG trading (10 months) | ||||
|---|---|---|---|---|
| Revenue | Underlying profit | Order book | Staff | |
| Construction | £378m | £7.6m | £435m | 462 |
| Fit-out | £319m | £12.1m | £157m | 518 |
| Engineering services | £238m | £3.8m | £196m | 282 |
| Retail + Realys | £181m | £8m | £145m | 402 |
| Asia, Europe, Mid East | £213m | £3.8m | £111m | 951 |
| Total | £1.3bn | £25m | £1bn | 2615 |
During the period UK construction was reorganised into three regions: Southern; Western; and Northern and Scotland. The business has been strengthened with new leadership and further operational improvements.
The division took £4.3m of further losses after closing out the last legacy contracts taken on during 2012 and 2013.
The London Exclusive Residential business was closed down along with operations in Russia, South Africa and Realys China.
The fit-out business continued to perform strongly delivering highest profits and after year end secured a £130m order from Goldman Sachs for its new UK headquarters in London, and the £42m London office for a leading US-based global technology company.
The firm’s head count remained stable at 2,740.