T Clarke enjoys rise in profit margin to 4.2%

T Clarke, the electrical contractor, has reported an increase in profit margins to 4.2% as pre-tax profit lifted to £8.2m last year.

Turnover in the 12 months to 31 December 2007 was 4 % higher at £190m. In the previous period (2006) a profit of £6.6m gave Clarke a margin of 3.5%.

Pat Stanborough, chief executive, said: “The group is in good shape. We have a broad spread of businesses across the UK which are trading well.”

“Despite the banking credit crunch, we are not seeing any slowdown in demand for high-density office space in the City of London and Canary Wharf.

“We are informed from our industry contacts and the major developers that the new buildings, with which we are involved, either in contract or early discussions, are fully funded and committed for development.

“Many financial institutions continued to be busy in upgrading trading space, enhancing their data centre capabilities (throughout the UK) and updating the resilience of their electrical networks.

“There has been some slowing in new build residential homes, particularly in Scotland. However, our London and regional businesses are still experiencing strong demand in the retail, leisure, and educational facilities sectors.

Clarke has two operational divisions:

• London – turnover of £77m was down on 2006 by £3m
• UK Regions – turnover of £117m was £11m higher

London brought home the bacon in terms of margins, with a sizzling figure of 6.7%.

Recently won contracts in London include Ropemaker Place and Central St Giles.

Clarke’s UK Regions operation could only hold the previous year’s profit contribution of £2.5m, a performance which generated a margin of 2.1%. The problems, flagged up at the half-year stage, were in two regional companies: Anglia Electrical Services and JJ Cross.

“Management changes and closer monitoring of specific projects were put in place to address the problems,” said Stanborough.

The group’s cash generation improved, with net cash from operations rising to £11m for the year, up £6m.