7th May 2015 07:54
LONDON (Alliance News) - Morgan Sindall Group PLC on Thursday affirmed its full-year expectations as it said trading remains in line with its forecasts in the year so far, but said it is set to book an exceptional charge in its half-year results related to long-running disputes on four contracts.
The construction services company said its order book at the end of March was GBP2.7 billion, up by 2% against the end of December, with increased volumes in its Fit Out business seen at the end of 2014 continuing into this year.
Construction & Infrastructure division results have been held back by the performance of a number of contracts the group holds in London and the South, and the company sees this continuing at least through the first half as the contracts are worked through to completion.
Affordable Housing construction and services margins remain under pressure but are starting to show signs of improvement, Morgan Sindall said, while its response maintenance segment has made good progress on securing new contracts and improving its operational performance.
Morgan Sindall also said it will book an exceptional charge of GBP35 million in its half-year results to the end of June related to two legacy contracts. The contracts were transferred to Morgan Sindall in 2007 as part of its acquisition of the design and project services division of Amec PLC, the engineering company now called Amec Foster Wheeler PLC.
Both were awarded by the UK's defence department, with one relating to the construction of a floating jetty and the other to the design and construction of living accommodation and infrastructure for the Faslane Naval Base in west Scotland.
Morgan said it has now received a court judgement on one discrete issue in advance of a future arbitration hearing on one of the contracts and, after considering the implications for the other deal, has decided to book the non-cash charge.
Shares in Morgan Sindall were down 1.9% to 765.01 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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