New chair says firm will focus on profitability, cash and margins
Consultant Sweett Group is to undergo a strategic review after reporting a slump in pre-tax profit of almost 90%.
Sweett Group executive chair John Dodds, who is also chair of steelmaker Severfield, and ran Kier as chief executive for seven years, said a 鈥渂usiness operations review鈥� had already taken place following his appointment in July and that a 鈥渟trategic review鈥� was 鈥渄ue to commence shortly鈥�.
He added: 鈥淩egardless of the outcome of the strategic review, the focus for the group going forward will be on profitability, cash generation and margins.鈥�
Dodds made the comments after the announcement of Sweett鈥檚 half year results for the six months to 30 September in which the firm reported a 89% fall in pre-tax profit to just 拢300,000, down from 拢2.8m over the same period last year.
The fall in profit follows a warning to the City in November that its results for the year to 31 March 2015 would be 鈥渕aterially below market expectations鈥�.
The firm also reported today that revenue for the first half of its financial year was down 4% to 拢42.5m.
Dodds said the results reflected a 鈥渕ixed performance鈥� in its overseas businesses, which countered 鈥済ood progress鈥� in the UK.
He promised to deliver a full update on the firm鈥檚 strategy at its full-year results, but indicated that it was likely to see the firm, which has grown rapidly overseas in recent years, refocus around its profitable domestic business. He added that management of 鈥渙verseas risk鈥� needed to improve.
The firm鈥檚 statement to the City said: 鈥淥ver the past seven years, the group鈥檚 strategy has been focused on organic and acquisitive growth to form a global network.
鈥淭he future strategy for Sweett Group is under review but currently the focus is on profitability, cash and working capital discipline and margins, whilst leveraging our excellent people and brand鈥� The global network remains important in the context of meeting the demands of the group鈥檚 global corporate clients, but not at the expense of the above priorities.鈥�
Sweett said its order book had risen considerably to 拢111m, compared to 拢101m at the same time last year. It said it was diversifying the business into new sectors in particular infrastructure.
It also reported a rise in net debt to 拢10.1m up from 拢9.4m.
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