Vinci UK has said profit margins will fall in 2009 as a result of the credit crunch.
The warning came as the company posted a 22% rise in turnover to 拢774m for the year ended 31 December 2007. Pre-tax profit increased 27% from 拢32m to 拢40m, boosted in part by the sale of two divisions. The result was a margin of 5%.
Alec Comba, Vinci UK鈥檚 finance director, said: 鈥�2009 will bear the brunt of the slowdown.
A 5% margin is extremely high, but sadly, I don鈥檛 expect it to continue. We鈥檒l do well to get 3%, a figure that is more in line with the industry norm.鈥�
Comba said turnover in 2008 would also struggle to hit the 拢850-900m mark and a figure of 拢800m was more likely. Despite the prediction, David Joyce, Vinci UK鈥檚 chief executive, said the group was still on track to hit 拢1bn turnover by 2010.
The group鈥檚 acquisition rate of regional contractors will also slow, according to Comba. He said: 鈥淚t will be more opportunity-led because there will be more forced sellers out there. Valuations have become high, but that froth should come out of the market.鈥�
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