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Morgan Sindall confident of yearly results as robust trading continues

2nd Nov 2022 10:58

(Alliance News) - Morgan Sindall Group PLC on Wednesday said it was on track to deliver a full-year performance in line with expectations, despite continuing inflationary headwinds providing for a more challenging economic backdrop.

At September 30, the London-based construction company reported a total secured workload of GBP8.8 billion, up 2% from the year end, and up 3.3% from the end of the first half-year ended June 30, when it was GBP8.52 billion.

Its construction secured order book, worth GBP4.6 billion, was up 2% from the year end, and down 1% from the half-year.

Morgan's regeneration secured order book, worth GBP4.2 billion, was 3% higher from year end and up 8% from half-year.

While partnership housing has seen reduced sales since September 30, property services, contract phasing and mobilisations continue to drive higher activity in the second half.

Trading in construction and infrastructure has continued as expected. Morgan Sindall anticipates a full-year operating margin for construction in the range of 2.5% to 3.0%.

Active development schemes in urban regeneration have also progressed to plan, though the company noted that inflation and interest rate increases are providing some "scheme viability challenges". It expects average employed capital for the year in this sector to be between GBP90 million and GBP95 million.

There have been no changes to Morgan Sindall's previously announced estimate of building safety costs, expected to be in the range of GBP40.0 million to GBP50.0 million.

The company expects average daily net cash for the year to be around GBP250.0 million.

"In recent months, increased general market uncertainty together with continued inflationary headwinds have provided for a more challenging economic backdrop," said Chief Executive John Morgan.

"Despite this, trading across the group has been robust and with our high-quality secured workload giving good forward visibility, we're on track to deliver a full year performance in line with our expectations."

Morgan Sindall shares were trading 3.2% lower at 1,528.00 pence each in London on Wednesday morning.

By Holly Beveridge; [email protected]

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