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Fri January 28 2022

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Morgan Sindall still battling tight margins

8 May 14 While construction workload is on the rise, industry recovery is not making it any easier to turn a profit.

Morgan Sindall today issued a trading update ahead of its annual general meeting, making clear that competition remains cut-throat.

Overall, the company continues to trade in line with expectations. The group's committed order book as at the end of Q1 was £2.6bn, up 9% from the year-end position, while the regeneration and development pipeline was up 2% at £3.1bn.

In Construction & Infrastructure, market confidence has continued to increase, but margins remain tight, with inflationary cost pressures providing additional challenges.  The committed order book as at the end of Q1 for this division remains strong, up 4% from the year-end to £1.6bn. Fit-out orders have risen 25% since the start of the year. 

Margins in the Lovell housing contracting business “remain depressed by the impact of localised labour and material cost inflation”, the company said.

The maintenance side, however, has had some success in winning profitable new work and improving operational inefficiencies.

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