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VT Group posts strong results, continues Mouchel push

VT Group has posted a strong £4bn forward order book, and secured its first Highways Agency contract as it continues to push for the acquisition of consultant Mouchel.

In a statement to the London Stock Exchange, VT Group said it was performing: “Well in the second half of our financial year and we are making good progress towards meeting the Board’s expected performance for the full year.”

VT Group Chief Executive Paul Lester said: “Our business has shown good growth and we remain on track to deliver a full year performance in line with the Board’s expectations.”

The company said it had a £4bn forward order book and reiterated its interest in Mouchel, saying:

“In late 2009, we made two approaches to Mouchel Group plc (Mouchel), with a view to acquiring the business.  The Board of VT believes that a combination of VT and Mouchel would represent a strategically compelling proposition.

“The enlarged group would continue to have a strong focus on the public sector and its increased scale and enhanced capabilities would provide greater access to larger contract opportunities.

“The increased customer base and wider range of services would confirm the enlarged group as a leading provider of services to both central and local government agencies and to regulated industries. To date, Mouchel has refused to enter into any form of discussions,” it said.

VT Group has also entered into its first contract with the Highways Agency - Mouchel’s traditional sector, to maintain the Agency’s 200 Traffic Officer fleet cars, worth £25M over the coming four years.

“It will be our first large project with the HA and reflects an important part of the Group’s strategy to broaden our customer base within Government Departments,” read the statement.

VT Group, formerly shipbuilder Vosper Thornycroft, sold its remaining shipbuilding capability last year. It is using the proceeds from this sale to finance a potential takeover of Mouchel, and has banking support.

“The cash proceeds received have further strengthened our balance sheet. At 31 December 2009, the group net cash position was £92M (September 2009: net debt £191.3M).”

However, Mouchel is in danger of losing two key Highways Agency contracts to rivals this week. Should it do so, VT Group’s offer may prove irresistible for Mouchel’s shareholders.

Shares in VT Group fell less than 0.5% in early trading, to 439p. Shares in Mouchel rose more than 4% to 258p

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