New strategic plan to further improve margins
FY23 preliminary results delivered a strong turnaround in profitability on modestly lower revenues, highlighting action taken on costs and improved levels of utilisation. With a solid foundation now in place, we expect the new strategic plan to deliver an uplift in gross margins of c. 20% by the end of FY27. With plans in place to expand top line revenues plus a focus on added value expert services and related sectors, the outlook is bright and not yet reflected in the company’s current valuation in our view.Year-end cash made up 42% of the Group’s market capitalisation and 37% of the NAV. This values the underlying business on modest ratings. We retain our 40p fair value / share which will be re-assessed as earnings momentum feeds through.
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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