Bottom Line: McAlpine's long haul

ALFRED McALPINE'S shares have outperformed the rest of the market by 64 per cent over the past 12 months, very nearly tripling in value. Despite slipping 2p yesterday to 213p, they stand on a prospective p/e ratio of 30, a multiple that only falls to 18 on estimates of profits 16 months hence.

That is asking a great deal more than the gloomy comments of the new chief executive, Oliver Whitehead, suggest is feasible. McAlpine is too small to act as a bellwether for the sector, but yesterday's figures should act as a salutory warning ahead of the rest of the interim results season.

On slightly lower sales of pounds 241m ( pounds 250m) in the six months to April, last year's pre-tax loss of pounds 71,000 ballooned into a pounds 2.48m deficit. A loss per share of 3.3p made a maintained interim payout of 3p hard to justify.

Only the US business registered a profit after interest and the three home divisions all ended the half in the red.

The outlook for construction is bleak, with everything hinging on a cash-strapped government's willingness to put real money behind its infrastructure promises.

Mr Whitehead is right to observe that the country can hardly afford the grandiose plans put forward over the summer. Sales of minerals cannot hope to buck the contracting trend.

The only bright spot is house-building, where a pounds 1.3m loss was reined in to leave a more modest pounds 254,000 shortfall. Higher volumes and better margins, as expensive land is worked through, should ensure that the seasonally stronger second half leads to a better result than last year.

It is going to be a long haul and, although McAlpine now has a decent hand on the tiller, it will take more than expected profits of pounds 5.8m for the full year to make the shares anything other than a sell.