Lilley misses payout due to 'uncertainty'

LILLEY, the Glasgow-based contracting and construction company, has managed an 18.5 per cent increase in interim pre-tax profits to pounds 2.08m but is paying no interim dividend because of the 'hostile and uncertain climate', writes Alison Eadie.

Bob Rankin, chief executive, said the 1p interim dividend last year was funded from reserves. A small company with a limited balance sheet could not do this indefinitely. No decisions had been made about the final dividend.

Operating profits fell 29 per cent on turnover nearly 4 per cent lower, but the pre-tax result benefited from a more-than-halved interest charge of pounds 1m.

The company is concentrating on reducing debt and conserving cash as it contends with a declining workload and tightening margins. Debt has been slashed by pounds 20m and annual overhead costs reduced by pounds 4m, the full benefit of which will be felt next year.

Mr Rankin said Lilley's markets had become tougher in the past three to four months, with order intake and house sales below those of last summer. In contracting the company had some substantial infrastructure work including road contracts and a major tunnelling contract.

However, it had suffered from the disappearance of spending on schools and hospitals.

Lilley's shares rose 1 1/2 p to 8 1/2 p.