TClarke upbeat on 2016, but warns of inflationary pressures in 2017

TClarke reports an exceptionally good year in 2016, but notes a "significant fraud" at a subsidiary and warns of inflationary pressures possibly holding back margin improvement in 2017

At 14:48 GMT, shares in building services contractor TClarke were down 5.68% to 81p each.

Chief executive Mark Lawrence said he was delighted with the results, commenting that the business was clearly making good progress.

"Our focus on improving performance and margins throughout the Group continues to show through," he added.

He said it was equally pleasing that TClarke had been awarded further contract wins that meant its forward order book at the end of February stood at £350m, a new record.

"In addition, to support our prefabrication capabilities we will shortly be opening a brand new 26,000 Sq Ft facility at Stansted, Essex," said Lawrence.

"The outlook for the future remains positive."

The company, however, was disappointed to have discovered a significant fraud at one of its subsidiary companies during the year.

An independent and comprehensive review of internal controls and procedures was commissioned immediately, with recommendations being implemented.

"The board is satisfied that the fraud was limited to the subsidiary company in question and that the full extent of the fraud has been identified. Legal proceedings are ongoing."

Meantime, TClarke posted an improved full-year pre-tax profit of £2.9m, up from a re-presented profit of £2.8m a year previous.

The company's revenue rose to £278.6m, from £242.4m. Total dividend was 3.2p a share, a slight rise from 3.1p a year ago.

Looking ahead, chairman Iain McCuster said 2016 was an exceptionally good year, both in terms of underlying trading performance and cash position at year's end.

"Whilst we are focused on delivering sustained margin improvement over the long term, at this early stage of the current year we cannot ignore inflationary pressures which may hold back further margin improvement in 2017.

"Nevertheless, the board is confident that the Group is well placed to meet market expectations for the year ahead."