Morgan Sindall upgrades outlook, announces buyback

It broke the update down across its business areas. Fit Out has continued to deliver strong profits and, supported by its visible order book, is well positioned to deliver a full-year result slightly ahead of the prior year's £139.9m.

Construction continued to perform strongly and is on track to deliver materially higher, double-digit profit growth, significantly ahead of expectations. Operating margins for the full-year are now expected to be at the upper end of the 3.5%-4.0% medium-term target range, reflecting the division's disciplined approach to bidding, delivery and risk management. The division expects to make good progress towards revenues of £1.5bn.

Infrastructure has performed well in the year to date and is also expected to deliver double-digit profit growth, while advancing its progress on planning and design activities across major frameworks, with two energy projects supporting the Great Grid Partnership now in construction phase. Previous guidance remains unchanged.

Partnership Housing has continued to strengthen its resilience, through self-help and capital efficiency measures for the forthcoming years. While profits are now expected to be below previous expectations, reflecting prevailing market conditions of low consumer sentiment and affordability pressures, the division is well placed to benefit from the Government's Your First Home scheme.

Mixed Use Partnerships continued to prioritise project starts, with seven projects commenced on site in the first nine months and a further three planned by year-end. As these project starts are largely second half weighted, the trading performance for the year will reflect their associated upfront investment costs, with the full year expected to show a loss similar to prior year levels.

The group says it is committed to maintaining a strong balance sheet and a significant net cash balance. However, with daily average net cash rising to £400m, from £362m, the board voted to return surplus capital to shareholders of up to £75m, to be implemented through a share buyback programme.