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Interior is aiming to expand its reach
The builder of the 2012 Olympics velodrome announced a 33 per cent rise in annual profits yesterday as it sought to soften the blow of faltering office markets in the capital.
Interior Services Group has won the 80m deal to build the showcase venue, which could host a clutch of British golds after the cycling team's Beijing success.
The scheme is one of several landed by ISG outside its main fit-out business in London as the firm expands its regional and international footprint.
Underlying pre-tax profits at ISG, which has 1,500 UK staff, were 33 per cent ahead at 14.1m in the year to June 30.
ISG has been looking to reduce its dependency on the cyclical market in the capital, which now accounts for less than half of the group's operating profits.
The lower demand for space has seen its order book for London fit-out schemes fall, although since June the firm has won the 50m fit-out of financial services company KPMG's new Canary Wharf headquarters.
But ISG has bolstered its regional presence with acquisitions such as construction firm Pearce, which operates in the South-West and South Wales. Pearce has framework deals for fit-out work with the UK's top three supermarkets, Tesco, Asda and Sainsbury's.
ISG's regional arm has also landed four education deals for colleges in Leicestershire, Marlborough, Bristol and Cheshire in the past six months.
Chief executive David Lawther said: "In the UK the greatest impact so far from the deteriorating economic climate has been in the private residential market where we have little exposure. In anticipation of tightening commercial demand, we have reduced our dependence in London on the office market whilst increasing our regional involvement."
ISG has also grown to 500 staff overseas from scratch in the past three years and hopes for further gains in the fast-growing Asian market after winning jobs from investment banks such as UBS and JP Morgan.
Panmure Gordon analyst Andy Brown said: "Our caution is due to the uncertainty surrounding the commercial property market and particularly London.
"Recent acquisitions have diversified this exposure, with these results showing that this strategy is delivering."
ISG is based in London but has eight regional offices at sites including Bristol, Birmingham, Manchester and Ipswich.
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Thursday 24 May 2012
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