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Sat October 20 2018

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Profits leap at Morgan Sindall

22 Feb Morgan Sindall has reported a near 50% rise in pre-tax profit, with notable improvement across its Fit-Out and Construction divisions.

Chief executive John Morgan
Chief executive John Morgan

Revenue for the year to 31st December 2017 was up 9% to £2,793m (2016: £2,562m). Pre-tax profit was up 48% to £64.9m (2016: £47.4m).

Operating profit was up 41% to £68.6m (2016: £48.8m), resulting in an operating margin of 2.5%, up from 1.9% in 2016.

Revenue from the Fit Out business grew 16% to £735m, with an improved margin of 5.3% (2016: 4.3%) giving an operating profit up 42% to £39.1m (2016: £27.5m). 

The Construction & Infrastructure division contributed an operating profit of £20.4m (2016: £8.9m) at an operating margin of 1.5%, up from 0.7% in 2016.

The target for Construction (including Design) is an operating margin of 2%, while the target for Infrastructure is an operating margin of 2.5%, the company said, adding that: “2018 is expected to show further progress towards these targets, supported by the quality of core sector work in the division's secured order book”. 

The Property Services division was impacted by restructuring costs in the year and so made a loss of £1.3m.  

Chief executive John Morgan said: "These strong results are evidence of the significant operational progress being made across the group and are a testament to the high quality and commitment of our people.

"Our positive cash generation and increase in average net cash in the year has further strengthened our balance sheet and provides us with the flexibility to invest in our regeneration activities whilst allowing us to continue being highly selective with bidding in our construction activities.

"Looking ahead to 2018, we expect continued margin progression in Construction & Infrastructure, another strong performance from Fit Out, further growth from Urban Regeneration and Partnership Housing and positive contributions from Property Services and Investments. 

"Consequently, we are confident of another good year of progress and with this positive momentum, are well-placed to deliver a result for the year which is slightly above our previous expectations."

Results by business segment

Revenue

Operating Profit/(Loss)

Operating Margin

 

£m

change

£m

change

%

change

Construction & Infrastructure

1,395

+6%

20.4

+129%

1.5%

+80bps

Fit Out

735

+16%

39.1

+42%

5.3%

+100bps

Property Services

66

+20%

(1.3)

n/a

(2.0%)

-330bps

Partnership Housing

474

+9%

14.1

+5%

3.0%

-10bps

Urban Regeneration

175

+12%

10.0

-25%

n/a

n/a

Investments

11

n/a

0.5

n/a

n/a

n/a

Central/Eliminations

(63)

 

(14.2)

     

Total

2,793

+9%

68.6

+41%

2.5%

+60bps

MPU

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