19th Dec 2006 07:01
Morgan Sindall PLC19 December 2006 Morgan Sindall plc Pre-close Trading Update The Board of Morgan Sindall plc today announces a trading update, prior to itsclose period, for the year to 31 December 2006. The Group's preliminary resultswill be announced in February 2007. Trading Overall the Group has made further progress during the year and is trading inline with expectations and again seeing year on year growth. Fit Out's market has remained buoyant and the division has traded stronglythroughout the current period. In November the division secured its biggestcontract to date with Deloitte, which is in line with its stated intention ofdelivering larger scale projects. Overall the forward order book has beenmaintained at a level similar to June 2006 and this order book supports our viewthat the current market strength will continue well into 2007. Construction continues to focus on its target sectors of health, education,light industrial and commercial. Revenue and profit for 2006 are expected toincrease modestly on 2005 and the forward order book has been broadlymaintained. Infrastructure Services has been very successful in securing £800m of newcontracts across the infrastructure, utilities, tunnelling and rail sectors,which is expected to lead to increased revenue and profit in 2007. Inparticular, the new rail business is performing well and is expected tocontribute significantly to this growth. However, as previously announced, thecombination of the reorganisation of the division in the first half of the yearand the commencement of new contracts will impact margins in 2006. Affordable Housing's margin continues to grow strongly. Current workload isbalanced between new build and refurbishment activities, with the Decent Homesframeworks continuing to be an important part of the division's workload.However, we expect future growth to be increasingly driven by larger, morecomplex mixed tenure schemes. The forward order book has been maintained andthere are also a number of larger scale opportunities in the pipeline. Overall the forward order book stands at £3.4bn, an increase of 22% since thebeginning of the year. This reflects, in particular, the strong marketconditions in Fit Out and Infrastructure Services. Average cash balances willbe lower than in the previous year owing to the £23m acquisition in March of thenon-track rail business and further investment in working capital at AffordableHousing. All of our markets continue to demonstrate growth and the outlook forthe Group remains positive. 19 December 2006 Enquiries:Morgan Sindall plc Tel: 020 7307 9200Paul Smith, Chief ExecutiveDavid Mulligan, Finance DirectorCollege Hill Tel: 020 7457 2020Matthew Smallwood This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Morgan Sindall Group