Despite increased market uncertainty and inflation providing a more ‘challenging’ economic backdrop, Morgan Sindall says that trading remains ‘robust’ and its financial results for 2022 are set to be in line with expectations.
Construction activities are expected to deliver an operating margin for the full year within its target range of 2.5% and 3% while the operating margin from Infrastructure activities is also expected to be within its target range of 3.5% to 4%.
The fit-out business is “well-placed to deliver a very strong full year performance”.
Partnership Housing has seen sales low recently, in line with the rest of the market, but the focus on long-term partnerships with public sector clients provides some insulation.
However, Muse, the urban regeneration business, is more exposed to inflation and interest rate increases, which are “providing some scheme viability challenges”, the company said.
The total secured workload for the Morgan Sindall Group at 30th September 2022 was £8.8bn, up 2% from the start of the year and up 3% from the 30th June half-year point.
Within this, the construction secured order book is £4.6bn and the regeneration secured order book is £4.2bn.
Average daily net cash since 1st January this year has been £260m (of which £62m was held in jointly controlled operations or held for future payment to designated suppliers). Average daily net cash for the full year is expected to be around £250m.
Chief executive John Morgan said: “In recent months, increased general market uncertainty together with continued inflationary headwinds have provided for a more challenging economic backdrop.
“Despite this, trading across the group has been robust and with our high-quality secured workload giving good forward visibility, we’re on track to deliver a full year performance in line with our expectations.”
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