Trowse-based May Gurney still addressing difficulties but wins contracts worth £276m
PUBLISHED: 15:20 09 October 2012
May Gurney said today it had won more than £276m of new work in the first half of its financial year, but is still addressing ongoing difficulties with its Scottish Utilities business and an two long term environmental services and kerbside recycling contracts.
In a trading update May Gurney said among a number of new contract wins, it had clinched a seven year recycling contract extension in Somerset worth up to £100m.
Last month May Gurney bosses warned profits were set to dip by £5m to about £25m. The firm, whose headquarters is in Trowse, near Norwich, announced the departure of its chief executive Philip Fellowes-Prynne by mutual consent.
The company said at the time that on-going difficulties with its Scottish Utilities business and “serious operational issues” with two long-term contracts, linked to its MaGos environmental services and kerbside recycling business, and the run-down of its facility services division led the board to the conclusion that the group will “significantly under-perform its original expectations for the current year”.
But in a more upbeat trading statement today the company said in the first five months it had won a total of £126m of new work and £150m of contract extensions. The business has a “solid” order book of £1.5bn.
At 30 September, the group said it had gross cash of £20m and borrowings of £23m, with total borrowing facilities of £48m, comprising a £15m overdraft facility and a revolving facility of £33m.
In addition, the Group had obligations under contract-backed finance leases of £74m.
Willie MacDiarmid, who has stepped in as May Gurney’s interim chief executive, said plans were in place to address the issues highlighted in September.
He said: “I have also been very encouraged by positive conversations with our clients, and by our business wins in the first five months, totalling more than £276m. With robust operational improvements and efficiencies being driven forward, May Gurney is focused on delivering a solid future performance.”
Investec analyst John Lawson said it was encouraging that no more black holes had been found, but it was still early days.