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Morgan Sindall finds inflation manageable

3 Nov 21 Morgan Sindall reports strong trading conditions with minimal disruption from supply chain challenges.

In a trading update to shareholders today Morgan Sindall said that it was on course  to deliver full-year results ahead of previous expectations.

It said that the rising costs and reduced availability of materials and labour “remains manageable”.

Trading has remained strong in Construction & Infrastructure division. Construction activities are expected to deliver a full year operating margin of around 3%, while the operating margin from Infrastructure is expected to be “well in excess of 3.5%”.

The Fit Out division has had a record period of winning work and converting projects from preferred bidder stage into contract. At the end of September, its order book was £944m, up 62% from the half year position and up 130% from the year end.

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Partnership Housing has continued to see high levels of unit sales and completions as well as construction activity and is well-placed to meet its medium-term return on capital target of 20% for the year, the company said.

Muse, the urban regeneration business, was the only division to sound a cautious note – “active development schemes have progressed as planned, however viability challenges exist on some projects not yet commenced”.

Total secured workload for the group at 30th September 2021 stood at £8.9bn, up 7% from the start of the year. Within this, the construction order book was up 20% to £4.7bn.

Chief executive John Morgan said: “Trading remains strong across the group and our high-quality and growing workload leaves us well set for the future. Inflation in the supply chain remains manageable and based upon our current performance and the visibility we have for the rest of the year, we expect to deliver a full year performance which is slightly above our previous expectations.”

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