Business Review
Segmental performance
Asset Management
| Key performance indicators | 2009 | 2008 | change | |
| Financial metrics | ||||
| Revenue | £47.6m | £52.4m | -9.2% | |
| Operating (loss)/profit | £(6.8)m | £2.8m | -342.9% | |
| Operating margin | (14.3)% | 5.3% | -19.6pp | |
| Share of post-tax JV profits | £0.3m | £0.2m | +50% | |
| Profit on disposal of JV | £2.5m | – | – | |
| Work in hand | 99% | 99% | – | |
| People | ||||
| Staff numbers at 31 March | 671 | 669 | 0.3% | |
| Average staff numbers | 682 | 674 | +1.2% |
The result for the Asset Management segment was poor, having been materially impacted by increased onerous contract provisions and remediation costs, totalling approximately £12m, associated with one of our 10 long-term legacy PFI maintenance contracts where we act as managing contractor. The remainder of the contracts are performing in line with expectations and the business also benefited from a non-recurring gain of £1.7m.
Performance in the managing agent business was ahead of expectations and the prior year. This business has recently secured a new five-year contract with a major financial services client and been invited to expand the scope of services provided to two public sector clients.
The segment also realised a profit of £2.5m on the disposal of our interest in Modern Housing Solutions (Prime) Limited at the beginning of the year.
Outlook
Our Asset Management segment is dominated by a relatively small number of long-term contracts and work in hand at 31 March 2009 represented 99% of budgeted revenue for 2009/10 (2008: 99%).
