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May Gurney Half-Year Profit Climbs on Rail, Highway Contracts

Dec. 1 (Bloomberg) -- May Gurney Integrated Services Plc, a U.K. infrastructure-maintenance company, said first-half profit grew 30 percent as it secured new rail and local authority highway customers.

Net income in the six months to Sept. 30 rose to 7.9 million pounds ($12.3 million), or 11.55 pence a share, from 6.1 million pounds, or 9.02 pence a share, a year ago, the Norwich, England-based company said in a statement today. Revenue grew 21 percent to 288.9 million pounds.

May Gurney said it sees less demand for its highways services as Britain faces the biggest fiscal squeeze since World War II to tame a record budget deficit, with cuts to spending among local authorities. Highways services account for 40 percent of profit, Chief Executive Officer Philip Fellowes-Prynne said today.

“We will have to deliver our contracts more efficiently and deliver quicker when there are repairs,” Fellowes-Prynne said in a telephone interview. “We are positive about our outlook for 2011 and we are confident about meeting market expectations for the full-year.”

May Gurney said today it has been named preferred bidder for three new highways maintenance contracts for Surrey County Council with a total value of 93 million pounds. The company said its forward order book is 1.4 billion pounds and hopes to add potential contract extensions worth 1 billion pounds.

“Management’s success in winning new work and gaining market share should help offset funding pressures and the order book of 1.4 billion pounds continues to provide good underpinning,” Mark Fleetwood, an analyst with Brewin Dolphin Research said in a note to clients today. Fleetwood has the stock “under review.”

The stock made its biggest one-day gain in six weeks, adding 3.6 percent to 224.24 pence at 8:38 a.m. in London. The stock has lost 14 percent in value this year, giving the company a market value of 157.5 million pounds.

To contact the reporter on this story: Renee Lawrence in London at rlawrence7@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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