ISG Group's maiden results to be in line despite impact of older contracts

14th Jul 2015 11:42

(ShareCast News) - Construction services group ISG said its UK and international trading has been ahead of expectations thanks to new contracts.However, the company's results for the year ended 30 June 2015 are believed to be affected by sizeable contract losses in the UK during 2012 and 2013.It was also hit by costs of £10m for closing its London Exclusive Residential and its Tonbridge business due to unexpected cost overruns and delays on its remaining four live projects."We believe the poor performance and painful restructuring of the UK Construction division is now behind us," the company said.As a result, ISG expects to pay a dividend of 5p following an improved second half.Numis analysts said that despite the effect of the older contracts, they think this is "an attempt by management to draw a line under the 2015 restructuring activities and a desire to enter 2016 in a strong position."In our view, the current share price fails to reflect the reduction in both the risk profile and our estimates of a materially improved profit position in 2016 and we therefore remain buyers."Shares were up 3.38% to 168p on Tuesday at 1110 BST.