Structural changes boost Mowlem's margin to 1.6%

The benefits of Mowlem's structural changes "are already apparent" said chief executive Sir John Gains as he announced the group's latest interim results. They show margins running to 1.6%, ahead of the 1.4% figure that Mowlem achieved in the comparable period last year.

Turnover (six months to 30 June) of £960m (£930m) produced a pre-tax profit of £15m (£13m). "Our performance in construction services has been strong," said Sir John.

The forward orderbook stands at £2.7bn, a third higher than a year ago, with almost 70% of the work booked for 2004 and beyond.

Pall Mall, the cleaning business bought in 2001 for £42m, produced a profit of £2.5m, a rise of 19%. Mowlem's domestic insurance business, formerly known as Skillbase, has "turned around dramatically in the past two years", although Mowlem offered no indication as to its profitability.

Successes in PFI include a £78m schools project in Exeter and a £57m hospital in Lewisham. Mowlem is also provisional preferred bidder on two accommodation projects for the Ministry of Defence, with a total value of £5.2bn, one being a joint venture with Kellogg Brown and Root.