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News & Media > Financial

01:12:2009

May Gurney reports half-year results

On 1 December May Gurney reported results for the six months ended 30 September 2009.

Financial & operational highlights

Solid performance, with record turnover and underlying profits:
• First half revenues up to £239.1m (H1 2008: £231.6m)
• Underlying EBITA¹ up by 17% to £10.4m (H1 2008: £8.9m)
• Underlying EBITDA² up by 17% to £13.9m (H1 2008: £11.9m)
• Profit before tax³ up by 21% to £8.5m (H1 2008: £7.0m)
• Underlying earnings per share¹ up to 10.39 pence (H1 2008: 9.05 pence)
Interim dividend up to 1.8 pence per share (H1 2008: 1.725 pence)

Strong fundamentals:
• Strong balance sheet with net cash of £24.8m (H1 2008: £7.7m)
• Excellent cash generation and a well-funded pension scheme

Attractive growth prospects:
• Record forward order book of £1.4 bn (H1 2008: £1.25 bn) provides long-term earnings visibility
• Potential contract extensions of a further £0.9 bn (H1 2008: £0.75 bn)
• Strong prospect of adding to existing order book over next six months through an exciting pipeline of bidding opportunities

Long-term contract wins and extensions during the last six months totalling more than £500m:
• New highways maintenance contract for Lincolnshire County Council worth up to £350m (five years plus a possible five year extension)
• New environmental services contract for North Somerset Council worth up to £85m (seven years plus a possible seven year extension)
• New environmental services contract for Bridgend County Borough Council worth up to £75m (seven years plus a possible seven year extension)
• Contract extension for highways maintenance for Essex County Council worth up to £30m (one year)
• Contract expansion to include wider services for highways maintenance for Norfolk County Council worth up to £16m (two years, plus a possible two year extension)
• Structures framework for Network Rail extended by two years, covering a wider geographical area, worth £40-50m

¹ Underlying EBITA is Group operating profit before amortisation and non-recurring items.
² Underlying EBITA is Group operating profit before depreciation, amortisation and non-recurring items.
³ Underlying profit before tax (profit before tax, amortisation and non-recurring items) up by 13% to £10.1m (H1 2008: £8.9m).
Underlying earnings per share is defined in Note 4 of the financial statements.

Commenting on the results, Philip Fellowes-Prynne, chief executive said: "I am delighted that over the last six months May Gurney has achieved another period of record turnover and underlying profits, further strengthened its cash position, increased its forward order book to more than £1.4bn and won several significant new long-term contracts and extensions worth more than £500m.

"Within the last six months, May Gurney has become the market leader in the UK's local authority highways maintenance market following the win of the Lincolnshire County Council contract. In addition, we now deliver environmental services to 18 local authorities, with two of the UK's most progressive local councils recognising our environmental services as essential to the delivery of their ambitious recycling and carbon reduction targets.

"Despite these significant achievements, we are aware that our clients in the public sector face challenges in the coming years, with the impact of political change and a potential budget squeeze set against the trend of increased demand for 'essential' services. With deep, long-term client relationships, a leading market position and a reputation for efficient delivery, there is obvious opportunity for May Gurney to add value - especially as more and more clients seek to outsource essential services to long-term partners they can trust to deliver positive outcomes for their customers.

"May Gurney's exceptional performance, in the context of the current economic climate, is a testament to our leading market position as a provider of essential services and the resilience of our business model and makes us confident of the Group's future prospects."