Profits at utility support group Siteserv grow 11% as revenues soar

PROFITS AT utility and construction support group Siteserv grew 11 per cent in the 12 months to April 30th to €20.8 million, the company said yesterday.

Siteserv reported that revenues were up over 70 per cent during the period at €228.6 million from €133.8 million last year.

Pretax profits were down 25 per cent at €9.3 million this year from €12.3 million during the comparable 12-month period which ended in April 2008.

The fall in pretax profits was down to an increased interest bill. This charge went to €11.5 million in 2009 from €6.4 million last year.

Chief executive Brian Harvey told The Irish Times yesterday that the charge “reflected the full-year impact of the interest on the loans taken out to make acquisitions in the previous year”.

The slump in the building industry prompted the group to write down the value of its construction services business by €38 million.

This left it with a loss for the financial year of €29.4 million. Mr Harvey emphasised yesterday that this was a non-cash charge.

This resulted in a fall in the value of intangible assets on its balance sheet to €99 million from €145 million. Similarly, shareholders’ funds stood at €7.6 million at the end of its financial year in February compared with €43.5 million 12 months previously.

The company began life as a specialist in construction services, but has switched focus over the last 18 months to take in utilities and the energy industry.

In February last year, it bought Deborah Services in Britain, which provides support services to the energy industry and whose clients include Exxon Mobil.

Its infrastructure and UK divisions contributed €211.3 million to revenues, while turnover from its construction or “access” business, was at €17 million, compared with almost €41 million last year.

Mr Harvey said yesterday that forward contracts held by its utility-related businesses mean that it already knows where 50 per cent of the current year’s revenues will come from.

In a statement issued with the results yesterday, Mr Harvey said that the group’s long-term contractual revenues have played a key role in offsetting the impact of the recent economic turbulence on the group’s performance.