Cyril Sweett unveils 23% lift in profit just four weeks after public flotation

Just four weeks after floating on the Stock Exchange, the consultancy group Cyril Sweett has unveiled its first set of interim results. They show a 23% rise in pre-tax profit to £2.5m.

Turnover in the six months to 30 September was £29m (comparable figure in the same period last year: £24m). Sweett’s pre-tax profit in the earlier period ran to £2.0m.

Francis Ives, chairman, said: “I am pleased to announce our first set of results following the AIM listing. Our markets are strong, we continue to maintain our margins and we see opportunities to extend our activities into new markets overseas.

“The proceeds from the placing will not only support organic growth, but will also give us opportunity to extend our growth in the UK and overseas through acquisitions.”

Sweett floated on the Alternative Investment Market (AIM – the junior portion of the stock Exchange) at the end of October in a move that raised £8m of new money.

Shares were pitched at a price of 110p prior to the launch and the offer was 50% oversubscribed. Since then, the price has held steady in a market that has seen many other share prices in the construction sector slipping away rapidly.

Sweett’s share price lifted by 4p to 115p immediately after the latest results were unveiled this morning.

Segmental analysis shows that the bulk of Sweett’s turnover was from work within the UK (£28m) with the balance coming from Ireland (£1m).

Sweett also offers a split of its business by three activities. Turnover then divides into:

• cost consulting: £16m
• project management: £9m
• Management consultancy/specialist services: £4m 

The group’s orderbook stands at £67m and 70% of new orders are coming from existing framework agreements and repeat customers.

Net debt ran to just £1.9m, down from £3.2m at the end of March and £3.7m a year earlier. The movement is a result of an “improved billing process and an increasing focus on collection of debtors”.

In the UK, the retail and shopping centre operation won several major awards including Trinity Quarter in Leeds, Covent Garden Estate in London and three new schemes for Tesco.

In prisons, the existing framework resulted in the award of work for Belmarsh, Dover, Winchester and Camphill.

In rail, Sweett was appointed to the Network rail framework and is also to provide cost planning advice to parts of the Crossrail project.

Presently, Sweett has 49 formal frameworks producing 20% of the group’s annual income. New frameworks have been won with the Office of Government Commerce (OGC) and Barclays Bank.

Over 75% of the group’s employees own shares – in total they hold 60% of the group’s shares, though 51% are locked into undertakings that prevents them suddenly coming onto the market.