Companies: SWG   

Not content with announcing a dramatic surge in interim profits and hitting the dividend trail, planning and engineering consultant Scott Wilson said full-year numbers would smash forecasts, prompting analyst upgrades.

Figures for the half to 29 October from Scott Wilson, which floated on the Full List last March and serves the transport, property, ‘environment’ and natural resources sectors, were nothing short of excellent.

On strong 23% turnover growth to £113.3m, predominantly organic, Scott Wilson scored a 24% surge in operating profits to £7.1m, and a dramatic leap in pre-tax profits to £8m (£3.6m).

A strong turn in the UK, as well as good progress in the international business (despite losses and restructuring costs in South Africa), drove profits, and operating margins of 6.3% were ahead of float targets. On the strength of the numbers, Scott Wilson’s new five-year plan to 2012 envisages an improved margin target of 8%. ‘What we’ve done so far has been very good in terms of growth, margins and acquisitions,’ explained Geoff French, chairman, who has overseen four acquisitions since last May that have boosted the company’s presence in Northern Ireland, as well as in the UK property, mining, nuclear and petrochemical sectors.

In buoyant markets, the order book has grown to a record £250m, boosted by major contract wins. Recent highlights range from the East London Line (work with fees of £14m), Edinburgh Airport Rail Link (fees of £18m) and Greece Ionia Odos Motorway (fees of £12m).

Upgraded forecasts for April 2007 suggest a rise in normalised pre-tax profits from £8.7m to £16m, upgraded from £14.9m, and earnings of 14.2p. Those numbers place the shares on a forward rating of 22.2, which isn’t especially cheap after a share price surge. Existing holdings are worth topping up.