Morgan Sindall directors reckon that, despite the UK going into a second national lockdown tomorrow, the uncertainty of just a few weeks ago has been lifted. Orders are coming in, the cash position is solid, work is continuing and construction should be unaffected by the new lockdown.
When Morgan Sindall announced its half-year results in August 2020, the board said that there was too much market uncertainty to justify paying out an interim dividend at that time. However, it committed to considering the resumption of dividend payments when there was further clarity over the economic outlook and risks.
Today it declared an interim dividend of 21.0p per share, in line with 2019’s interim dividend.
In a trading update Morgan Sindall said that momentum had gathered since the half-year results announcement on 5th August. At that time the board said that it expected profit before tax for the year 2020 would be in the range of £50m-£60m. It now looks like it will be better than that. And the cash position has strengthened – the average daily net cash for the full year is now expected to be in excess of £150m, again ahead of previous expectations.
Chief executive John Morgan said: “Following the disruption earlier in the year, all of the group’s activities are now fully operational again and delivering high levels of productivity. We welcome the prime minister’s clear statement that construction activity should continue through the new lockdown restrictions in England for November and we anticipate operating safely throughout with minimal impact.
“Our high-quality secured workload gives us good visibility for the rest of the year and as such, we now expect to deliver a full year performance slightly above the top end of our previous expectations.
“Our strong cash generation, position and balance sheet remain key differentiators. These, together with the improved outlook for the year, have enabled us to repay furlough monies and resume dividend payments as declared today.
“Despite the uncertainty that the pandemic brings, we have a sound platform for future growth with the group geared towards future demand for affordable housing, urban regeneration and infrastructure and construction investment.”