A sturdier foundation, with positive momentum
Management has undertaken a significant rationalisation programme, successfully commissioned new ERP software, and explored means of reducing central costs to place the Group on a sounder footing moving forward, following an extremely challenging FY22 for Driver Group. The actions are paying off, with Q1 ’23 moving into profit, with further progress anticipated from Q2 onwards.While it is difficult to assess the valuation of a business with no published estimates, what is very clear is the direction of travel. The significant cost reductions across the business, coupled with the focus on higher margin areas is highly likely to result in a marked turnaround in profitability during FY23. In fact, the new year has started strongly, with further progress likely in Q2. The one known is the net asset value at H1 ’22, of £20.2m or 39p/share. Of this, net cash amounts to £4.8m. Its global consulting peer group trades on a prospective December ’22 price/book ratio of 4.5x, significantly ahead of DRVs 0.7x. As such, we retain our previous fair value/share of 49p.
Driver Group is engaged in providing consultancy services to the engineering and construction industries. Co. is organized into three operating divisions: Europe and Americas (EuAm), Asia Pacific, Middle East and Africa (AMEA) and Initiate. In EuAm and AMEA the key service provisions are: quantity surveying, planning/programming, quantum and planning personnel, dispute avoidance/resolution, litigation support, contract administration and commercial advice/management. In Initiate the key service provisions are capital investment consultancy providing development, project and contracting management services to the infrastructure market in the U.K.
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