Morgan Sindall to beat expectations as profit rises 45%
Morgan Sindall expects its full-year results for 2017 to be “significantly ahead of previous expectations” after reporting a boost in profit in the first half of the year.
In a trading update to the City this morning, the contractor said it expected to post a pre-tax profit of £23.5m for the six months to 30 June 2017, up 45 per cent year on year.
Morgan Sindall said it had seen margin improvement in both its construction and infrastructure businesses, while its fit-out division, which reported a record order book of £544m in May this year, had also seen margin and profit growth.
The firm added that its partnership housing and urban regeneration arms had traded as expected, with urban regeneration posting a decline due to “the phasing of its scheme completions”.
The contractor also reported average daily net cash for the first half of £132m, with net cash of £97m at 30 June 2017.
Morgan Sindall said its performance in fit-out, coupled with improvement in construction and infrastructure, will lead to full-year results for 2017 being “significantly ahead of its previous expectations”.
City analysts were similarly bullish, with analysts Jefferies upgrading its pre-tax profit expectation for the year to £59m, up from a previous estimate of £53m.
“After recent events in [construction], strong performance in this sector is something to write home about,” Jefferies said.
“Morgan Sindall has not been without challenges here in the past and the group has been banging the drum about contract selectivity and enhanced risk management for some time now.”
Jefferies also added the firm “did well to stay out of HS2” due to the high level of risk associated with “high-profile ‘trophy’ contracts”.
The firm will announce its half-year results on 8 August.In its previous full-year results for the year to 31 December 2016, the group posted a pre-tax profit of £43.9m and revenue of £2.56bn.
News article courtesy of: Construction News ( click on hyperlink to direct to their website).