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Thu January 23 2020

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Morgan Sindall returns to profit

23 Feb 17 Morgan Sindall has reported a pre-tax profit of £43.9m for 2016 on revenue up 7% to £2,562m.

The result represents a turnaround for Morgan Sindall, which reported a pre-tax loss of £14.8m in 2015 after writing of £47m on Faslane contracts inherited from its 2007 Amec acquisition.

Even adjusted for exceptionals and intangibles, there was clear improvement with underlying pre-tax profit up 32% from £34.3m to £45.3m for the year endings 31st December 2016.

Chief executive John Morgan said: “These results demonstrate the considerable strategic and operational progress made in the group over the last few years and the underlying quality of the business.

“The UK is struggling to cope with the increasing demand for affordable housing and there is a clear need for government to deliver urban regeneration and infrastructure investment to support future economic growth. Morgan Sindall Group has strong established positions in these markets, and the balance sheet and cash position to fund further investment and growth.

“From this strong base, we are confident in the outlook and expect the positive momentum across the group to continue through 2017 and beyond. With significant opportunities in Partnership Housing, the continued improvement in operational delivery in Construction & Infrastructure, and the size and quality of our secured order book in Fit Out and elsewhere across the group, we are well-placed to deliver a result for the year which is slightly above our previous expectations."

In Construction & Infrastructure, the operating margin improved to 0.7%, compared to 0.3% in 2015. Adjusted operating profit was up at £8.9m (2015: £3.8m).

Headline results by business segment

Revenue

Operating profit/(loss)

Operating margin

£m

change

£m

change

%

change

Construction & Infrastructure

1,321

+7%

8.9

+134%

0.7%

+40bps

Fit Out

634

+4%

27.5

+15%

4.3%

+30bps

Property Services

55

-8%

0.7

+170%

1.3%

+300bps

Partnership Housing

433

+18%

13.4

+40%

3.1%

+50bps

Urban Regeneration

156

+42%

13.4

+4%

n/a

n/a

Investments

15

n/a

(2.0)

n/a

n/a

n/a

Central/Eliminations

(52)

(13.1)

Total

2,562

+7%

48.8

+26%

1.9%

+30bps

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MPU

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