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Morgan Sindall on track to deliver performance ahead of expectations

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morgan sindall

Morgan Sindall Group chief executive John Morgan
Morgan Sindall Group chief executive John Morgan

Trading at Morgan Sindall has continued to be strong in the second half of the year with the group set to deliver year-end profits ahead of previous expectations.

In a trading update for the period from 1 July 2017 to date, Morgan Sindall attributed the boost to an uplift in margins at its Construction & Infrastructure and Fit Out businesses.

The group said it also expects that its average daily net cash for the full year will be in excess of £100 million, ahead of previous guidance of not less than £75m.

Morgan Sindall’s committed order book as at 30 September 2017 was £3.8 billion, up 5% from the year end position (up 1% from the half year), whilst the regeneration & development pipeline of £3.3bn was up 2% from the year end (level with the half year).

Chief executive John Morgan said: “Construction’s recovery has continued and accelerated, with considerable progress towards achieving its medium term margin target of 2% expected in the second half.

“Infrastructure has performed as expected and its mix of work in the second half should drive the expected margin increase, ahead of its first half result.”

Divisional highlights

Construction Activities

  • Construction & Infrastructure has further improved performance, with its margin benefiting from the ongoing focus on operational delivery and contract selectivity.

  • Fit Out has achieved further margin progression ahead of its strong first half result and, based on its visible workload for the rest of the year together with its current contract delivery performance, very strong second half margin and profit is expected.

  • Property Services is proposing to exit its legacy insurance services business to better serve its core local authority customer base and the cost of this, together with the cost of further streamlining its contract portfolio by exiting underperforming contracts, will impact its operating result with a loss for the year of c£1m expected.

    • Regeneration Activities

    • Partnership Housing is focused on delivering construction and sales completions in its mixed-tenure business and a significant number of units are scheduled for fourth quarter completion. Average capital employed for the year is expected to be c£100m, less than previously expected and primarily as a result of deferred commencements of schemes.

    • The scheduled timing of scheme completions in Urban Regeneration remains on track and in line with plans. Average capital employed for the year is expected to be c£90m, in line with previous guidance.

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