22 May 2018 – trading statement
The house building and construction group has issued a trading statement for the period from 1 January to 21 May and this has confirmed that trading continues to go well. At Linden Homes, sales rates are encouraging which bodes well for the rest of the year whilst in construction the underlying performance continues to improve despite having to work through problematic legacy contracts. These are steadily diminishing though as time goes on whilst the business is seeing a good level of new project wins despite a highly disciplined approach to the bidding process. The Partnerships and Regeneration business continues to benefit from strong demand and margins here are expected to improve. The group is also making progress on the handover of the road in Aberdeen with which it was involved with Carillion – a provision of £25m was taken in the first half of the financial year on this and although further provisions may be necessary in the second half of the financial year to 30 June, these are likely to be less than that. With the recent fund raising now concluded the outlook is encouraging and we maintain our recommendation of BUY.