Morse expects second half revenue dip
'A difficult year' says services firm
Morse expects to report a slight dip in revenues from continuing operations in its second half compared to its first half of the year, the company announced in a trading update this morning.
The services group said its margins on that revenue would reflect the benefit of its cost cutting program through the year and the resolution of certain problem SAP projects.
The firm said its European infrastructure, services and technology unit would be marginally profitable for the full year, after an operating loss of £0.6m for the first nine months to March 31. It said all its invoices on its South Tyneside and Gateshead Building Schools for the Future contract were paid in full.
Morse expects to turn in exceptional charges between £10.2m and £11.2m for the full year, mainly down to "onerous lease and dilapidation provisions" on its properties. At the same time, it will have exceptional credits of £0.8m to £1.2m relating to share based payment charges which have been reversed, and the reversal of other provisions.
It reported an exceptional charge for goodwill impairment in the first six months of £13.8m.
CEO Mike Phillips said that it had been a difficult year for the group, but it was "pleased with the considerable progress that has been made." As well as battling a sinking economy it has been undergoing a wide-ranging "restructuring and change programme."
In April it revealed that the first nine months of its financial year it made revenues of £156.9m, down from £173.8m in the same period of 2008. Total operating profit was down to £2.8m from £7.8m in the same period of last year.
The update came less than a day after it revealed it had received "preliminary approaches at 25 pence per share". It said the firm's board believed this significantly undervalued the company, and that while they may lead to an offer for the firm, there was no certainty about this. The firm's shares are currently trading at 24.5 pence, down half a penny on its close yesterday. ®