Profits of £4.8m before tax were in stark contrast to the £124.2m of losses run up in 1993, a result that prompted a drastic attack on costs. The dividend is held at 2p.
"By concentrating on the core activities of contracting and scaffolding, the group has reduced its fixed and overhead costs by £30m year-on-year," Sir Philip Beck, chairman, said.
Profit margins in contracting remain depressed. The average margin is less than 1 per cent, compared with 2 to 2.5 per cent in the late 1980s.
Mowlem is not joining the scramble for overseas contracts. Instead, the company is exploiting the strengths of its regional network and "not chasing volume at the expense of margin", a spokesman said.
Trading profits from contracting were £800,000 on turnover of £1.1bn. Losses in the previous year were £14.6m on £1.06bn of turnover.
Sir Philip said: "The core UK contracting companies performed creditably in difficult market conditions. There were disappointing performances from engineering and BauTec in Germany, where restructuring is continuing."
Scaffolding and access services produced a trading profit of £13.4m on turnover of £247m, against restated losses of £26.4m on turnover of £255m.
Losses at the London City Airport, built and still almost 100 per cent owned by Mowlem,were cut from £4.8m to £2.9m. Passenger traffic almost doubled to 480,000. The airport remains up for sale.Reuse content