McAlpine bleeds as profits slump
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Alfred McAlpine is yet another famous construction group being bled white by its contracting division. The problems have been known about for some time, but the extent stunned the market yesterday, knocking 26p off the shares to leave them at 109p, almost half last year's 205p rights price.
Pre-tax profits have slumped to a negligible pounds 264,000 in the six months to June, compared with pounds 3.25m in an eight month period in 1994. Earnings per share slid to just 0.9p from 3.1p over the same two periods.
The figures are complicated by a change in the year end, but the underlying picture is clear. Construction, which still accounts for 70 per cent of McAlpine's pounds 361m turnover, contributed losses of pounds 2.37m after a pounds 400,000 deficit last time.
Most of the pain is concentrated on the building business. Margins have been slashed and McAlpine is seeking to cut back to profitable work, which will result in job losses amongst the remaining 3,500 construction employees and further restructuring charges.
The latest round of cuts comes on top of a near halving in the size of the construction operation over the past 18 months. The building order book has fallen to just over pounds 100m from close to pounds 200m at the end of 1993, and in civil engineering the figure is down to around pounds 150m from pounds 220m.
Housing, where profits dipped pounds 1.7m in the half year, is now the mainstay of the group. If McAlpine achieves full-year profits of pounds 5m, the shares stand on a prospective p/e of 15 and despite a maintained interim dividend of 3p, the final payment must be in doubt. Sell.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments