Newcourt profits fall on exchange rate weakness

Irish-based security, aviation and recruitment services group Newcourt said revenue increased 34 per cent to €22.4 million in the first half of the year, but profits were hit by weaker sterling rates.

Gross profit fell 1.4 per cent to €14.6 million in the six months to June 30th, compared to the same period a year earlier. Trading profit fell 5 per cent to €7.2 million.

The company said the weakening of sterling against the euro negatively impacted profit by about €220,000 compared to the year before.

Newcourt's business saw the most significant growth in the support services sector, which increased 51 per cent to €62.3 million. However, the firm warned that despite the increase in revenue, margin pressures impacted trading profit growth.

The company managed to hold on to the majority of the large security contracts that were retendered during the six months, but at a reduced margin. Despite this, however, Newcourt said the division's performance was "extremely satisfactory".

The recruitment division of the business experienced a challenging market, the company said, but matched its 2007 performance for the six months.

Meanwhile, investment in its UK aviation outsourcing operation accounted for a fall in the performance of that sector of the business, the company said.

Newcourt's student accommodation division saw trading profits slip 9 per cent, which is primarily being attributed to what the company described as "timing differences".

"Profits in student accommodation are largely transaction led and are, therefore, dependent on the timing of the closing of transactions," it said in a statement.