25/04/2006
We've been keen and consistent supporters of Mouchel Parkman, which once again beat City expectations with excellent interims to January.
Under chief executive Richard Cuthbert, this was another period of sales and profits growth for the group, which derives the bulk of its revenues from long-term outsourcing work in the public sector and regulated industry.
Revenues were lifted 25% to £175.1m, sending pre-tax profits 42% north to £12.5m. Highlights included a strong cash performance (more than 100% of operating profit was converted to operating cash flow), an impressive contract strike rate and news of a record £1.1bn order book.
In the highways division new contract wins and renewals helped revenues 14% higher to £82.4m. Maiden contracts were scored for the joint venture with Accord, for the Highways Agency and the London Borough of Harrow, establishing Mouchel Parkman’s position in the roads market. Margins were lower at 7% (7.4%), but this reflected the impact of bid costs in a busy bid period and ‘AccordMP’ set-up costs.
Elsewhere, margins spiked from 6.3% to 8% in government services, which encompasses property and regeneration activities as well as consulting work in ‘incubator’ sectors, education and housing. Cuthbert highlighted progress in rail and water, where work on AMP4 water contracts ramped up and ServiRail made an encouraging contribution.
For the year, Cazenove’s Michael Morris has nudged up his pre-tax forecast from £27m to £27.5m, ahead of £31m on £400.3m revenues for 2007. Forecast earnings of 17.7p and 19.5p leave the shares trading on prospective multiples of 19.6 and 17.8, roughly in line with consulting peers. Not cheap after a stellar share price performance, but well worth holding.
Growth Company Investor is the UK’s leading authority on small-cap and AIM companies. You can gain immediate access to all the recent share recommendations with no-obligation, with a free 30-day trial. Click here to join today.
James Crux
People who read this article also read ... |
| 27/04/2006 |
| 25/04/2006 |
| 25/04/2006 |
| 25/04/2006 |
| 24/04/2006 |
| LSE | £346.24m |
323.00p
|
-20.50p
|
|
Other company articles: |
| 25/04/2006 |
| 01/11/2005 |
| 03/08/2005 |
| 19/04/2005 |
| 25/01/2005 |
Invest in the Stock Market at TD Waterhouse
Open an account with TD Waterhouse and get two months commission free share trading. Trading accounts available online today.
Trade US Stocks with City Index
City Index spread betting - tax free dealing in shares, indices no commission, no stamp duty and CFDs (contracts for difference).
Commission-Free CFD Trading in Shares and Indices
Our award-winning trading platform offers free charting, news, analysis and mobile trading. CMC Markets UK Plc is authorised and regulated by the Financial Services Authority.