Construction Enquirer News Pandemic to cut margins to 0.5% this year but contractor confident in long term prospects

Nmcn has posted a profit for the first half of the year despite the impact of the Covid-19 pandemic.

Results for the six months to June 30 2020 show a pre-tax profit of £809,000 from £3.4m last time as turnover dipped slightly to £181.6m from £183.9m.

Chief executive John Homer said: “The first half of 2020 comprised two very different quarterly trading periods.

“We started the year well, with the financial results reflecting an encouraging order book and the benefit of a number of our initiatives.

“In the second quarter we faced the immediate challenges of Covid-19 with the suspension of projects and the disruptive impact of new operating requirements and these were compounded by some other operational issues.

“In overall terms, I am delighted to be reporting a profitable result for the period which we believe further demonstrates the value of our business model and dedication and capabilities of our teams.”

Nmcn is now predicting that margins for the full year will be 0.5% before recovering next year as its order book contains £350m of work.

It said: “The impact of this on our margins has been significant, and will continue to be so for the remainder of this year, due to several factors, including; margin deterioration from demobilisation of resources and remobilisation delays, reduction in operational productivity due to revised operating procedures, prolongation of current schemes, and the additional direct costs associated with Covid-19.

“Longer term, our chosen markets remain attractive propositions, in particular Water, Roads and Telecommunications, as priority targets for Government investment due to urgent national needs.”

Homer added: “In the longer term, the attractions and opportunities of our addressable markets remain.

“In the near-term, we are likely to continue to endure the constraints of a coronavirus environment but with a healthy order book and strong fundamental growth drivers and opportunities within our addressable markets, we believe the business will continue to progress.”

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