A decision on Mowlem鈥檚 future strategy will be revealed in the final quarter of the year, when the findings of a strategic review, involving management consultant McKinsey, are announced.
Mowlem chief executive John Gains said: 鈥淲e are beginning to gain clarity about where the group is going. We want to do work with customers who want to buy more than one of our services, so we can trade the value of our construction against maintenance and against facilities management.
鈥淚 view the facilities management market with a degree of excitement.鈥�
Hinting at the disposal of SBG, Gains said it was no longer a core investment. 鈥淲e have hung on to SBG and added as much value as we possibly can.鈥�
Analysts predict that selling SBG could generate 拢105m for an FM acquisitions. Gains would not say directly that the money from a disposal would be used for this purpose, although said he is 鈥渁lways looking for quality businesses鈥� and that any development would 鈥渕ost likely be in our services business鈥�.
The other alternative for Mowlem would be to return the proceeds of the sale to shareholders.
The group reported a 21% rise in pre-tax profit to 拢16.7m for the six months to 30 June 1999. The order book now stands at 拢1bn, of which 拢800m is in construction. A quarter of this work is overseas, mostly in the Far East.
Gains said the margin for the construction activities and services division, which was 1.2% before interest, compared with 1.1%.
in the same period last year, had been affected by investment in marketing initiatives and a number of claims. He set the division a target of 3%. Operating profit for the division rose 54% to 拢5.1m, on turnover up 9% to 拢541m.
Operating profit for facilities services business Aqumen was up 40% to 拢1.4m, with turnover up 32% to 拢90m.
The environmental services arm鈥檚 operating profit was up 11% to 拢2m on a static turnover of 拢18m.
The project investment and property division turned a 拢700 000 loss into a 拢100 000 operating profit on flat turnover of 拢4m.
The access products and services arm enjoyed a 15% increase in operating profit to 拢10.7m, on turnover up 拢1m to 拢129m.
