Tolent profits drop 27%

Tolent has highlighted the difficult trading conditions with the group reporting this morning that it has met with a slowing in the level of enquiries over the past six months, as pre-tax profit dropped nearly 27%.

Mike Speakman, Tolent’s chairman, said that making matters worse, some proposed projects have being put on hold while other clients have completely abandoned their plans.

Tolent’s latest interim results, covering the six months to 30 June, show pre-tax profit down at £1.1m (figure in comparable period of previous year: £1.5m) despite turnover being higher at £85m (comparable figure: £76m).

“Trading in the first half has been disappointing as a result of difficult conditions in the economy in general. Turnover was down on the second half of 2007 (figure in that period: £104m). This reflects a slowing in the level of enquiries and conversion of these into firm orders, along with a number of projects being deferred or cancelled,” said Speakman.

Tolent’s secured forward workload runs to £100m. A number of larger contracts run through to the end of 2009 which provides the contractor with some degree of security for the short-term.

In addition, there are orders worth another £70m that Tolent expects to get signed up in the near future. Once that happens, work would commence on site before the end of the year.

Tolent’s latest operating profit was trimmed back by a £750,000 provision against the balance of money due from a residential developer which has gone into administration.

Tolent ended the period with a cash balance of £11m, down on the figure of £13m a year earlier.

On 4 April, Tolent acquired the remaining 50% of Echo Buildings, previously a joint venture for a residential development. The price was just £1. As a result, the assets and liabilities of that company are consolidated in Tolent’s balance sheet for the first time.

Echo has been running with the help of a £5.9m loan from Tolent.

Segmental analysis shows turnovers in Tolent’s two main divisions to be:

• £82m – construction and building activities
• £4m – property operations

Their contributions to group profit, before allocation of central costs was:

• £440,000 – construction (previous figure: £1.0m)
• £280,000 – property (previous figure: £190,000)