Interim Results

MORGAN SINDALL PLC
10 August 1999


Results for the six months ended 30 June 1999

Morgan Sindall plc, the specialist construction group
comprising office refurbishment, regional construction and
affordable housing, today announces record interim results.

*  Record pre-tax profit up 24% to £6.28 million (1998:
   £5.05 million)

*  Earnings per share rose significantly to 14.01p (1998:
   11.56p), up 21%

*  Declared interim dividend of 2.50p, up 22% (1998:
   2.05p)

*  Acquisition of Lovell Partnerships, completed for a
   consideration of £21 million including £6 million of
   goodwill

*  Fit out performance again increased with operating
   profits up 23% to £3.74 million (1998: £3.05 million),
   with substantial margin improvement

*  Regional construction profits slightly ahead to £1.03
   million with potential of 20-30% turnover growth per
   annum to come

*  Cash balances following acquisition of Lovell
   Partnerships of £24.72 million excluding final payment
   of £6 million

*  Strong market conditions continue

John Morgan, Chief Executive of Morgan Sindall, said:

'The strong performance of Morgan Sindall over the first
half of this year further demonstrates the strength of the
group's brands and the uniqueness of its culture.  The
acquisition of Lovell Partnerships, the market leader in the
social and affordable housing sector, complements our
existing businesses both strategically and geographically.
It progresses our goal of building a balanced construction
group and continues our strategy of expanding into growth
markets.'
                                            10 August 1999
ENQUIRIES:

Morgan Sindall plc                    Today: 0171 457 2020
John Morgan, Chief Executive     Thereafter: 0171 307 9200
John Bishop, Finance Director

College Hill                           Tel:  [phone]
Matthew Smallwood
Michael Padley

CHIEF EXECUTIVE'S STATEMENT

I am pleased to report that Morgan Sindall has started 1999
successfully and that interim profits before tax are 24% up
at a record £6.275 million (1998 : £5.050 million). Whilst
these results are aided by the majority of this year's
expected property trading profits falling in the first half
of the year, it is pleasing that profits from our other core
businesses increased by 20% to £4.775 million over the same
period last year. With earnings per share at 14.01p (1998:
11.56p), the Board has agreed to declare an interim dividend
of 2.50p (1998: 2.05p).

Acquisition of Lovell Partnerships

On 16 June we completed the acquisition of Lovell
Partnerships.  The initial consideration paid was £15.0
million being £5.8 million for goodwill and £9.2 million for
the estimated net assets.  The determination of the value of
the net assets at completion is ongoing but the final
consideration is expected to be close to £21 million. This
was part funded by the issue of 3.25 million shares under a
placing and open offer that was fully taken up, indeed
healthily oversubscribed, and raised £8.2 million net of
expenses.

Lovell Partnerships designs, builds and markets social and
affordable housing throughout England and Wales. It is one
of the most widely recognised brands in this niche area and
its special expertise lies in forming partnerships with
local authorities and housing associations to provide mixed
tenure solutions particularly in urban regeneration schemes.

In Lovell Partnerships, we have acquired a leading player
which complements our existing businesses both strategically
and geographically, and continues our successful ongoing
strategy of targeting sectors with above average growth
prospects and building a significant presence in them.  I am
delighted with the response from the Lovell Partnership
staff and I am confident that within the Morgan Sindall
Group the future for Lovell Partnerships is exciting.

Operating Performance

Fit Out
The first half of 1999 has seen another strong performance
from the fit out business with operating profit moving ahead
to £3.742 million on turnover of £77 million (1998 £3.051
million profit on £75 million turnover). Both Morgan Lovell
and Overbury have a strong client base having been market
leaders in this sector for many years, but it is a credit to
their management that they continue to find ways to improve
their offering and please their clients. Responding to
clients' needs and concentrating purely on the work they
know and do best - made easier by having sister companies in
the regional construction business that may help clients
with heavier refurbishment - has enabled fit out to achieve
good margins and consistent results.

Regional Construction
Turnover for the first six months of the year of £139
million being up 22% on last year has supported my belief of
the growth potential of this business. Profits at £1.033
million have moved ahead slightly from last year but have
once again been held back by further costs arising from the
trading problems at Barnes & Elliott in 1998 as explained in
the Annual Report. However the new management team are
confident that they have now turned the corner. The market
remains strong and with good performances emerging in some
of the brands now reaching critical mass I remain optimistic
for the results of the full year and beyond.

Property and Interest
Property profits at £1.729 million and net interest of
£0.673 million (1998 £1.436 million and £0.573 million)
result from our proactive investment of our balance sheet.
The sale of the office building in Jockey's Field, London
for £5 million accounts for the majority of the property
profit in this first half of the year. This building
purchased two years ago, which has been fully income
producing was subject to rent review which nearly doubled
it's rental income and offered us the chance to sell at a
satisfactory profit. The development of the Wigmore Street
offices is proceeding satisfactorily with building
completion anticipated in early 2000.

Outlook

The first half of the year, whilst showing modest progress
financially, is I believe more significant for our expansion
of the Group activities by the purchase of Lovell
Partnerships. Our goal of building a balanced construction
group moves ahead with this move into affordable housing.
Our original fit out business continues to perform well. The
regional construction business has its structure complete
and is set for growth and, whilst profits are taking longer
than turnover to be proven, the trend is evident. Social and
affordable housing is a major construction market sector
where we already have some experience and the acquisition of
the Lovell brand will enable us to be a major player in this
growing market.

As a result of the share placement we continue to be net
cash positive which will enable us to further invest in
Lovell Partnerships and other suitable investment
opportunities that may arise. As always much remains to be
done, but I feel that the Group has pace and I am looking
forward to reporting further progress in six months time.

John Morgan
Chief Executive

10 August 1999

Group Profit and Loss Account (Unaudited)

                                  Unaudited      Unaudited        Audited
                                 Six months     Six months        Year to
                                         to             to
                                  June 1999      June 1998       December
                                                                     1998
                                     £'000s         £'000s         £'000s
Turnover                                                     
Continuing operations          221,201         194,272       422,161
Discontinued operations        -               1,623         2,406
                               221,201         195,895       424,567
Cost of sales                  (196,634)       (173,559)     (379,084)
                                                             
Gross profit                   24,567          22,336        45,483
Administrative expenses        (19,435)        (18,186)      (38,081)
Other operating income         462             455           1,045
                                                             
Operating Profit                                             
Continuing operations          5,594           4,596         8,440
Discontinued operations        -               9             7
                                                             
                                                             
Total operating profit         5,594           4,605         8,447
                                                             
Share of profits/(losses) of   8               (128)         67
joint venture
Net interest receivable        673             573           1,246
                                                             
Profit on ordinary activities                                
before taxation                6,275           5,050         9,760
Tax charge on ordinary         (1,372)         (1,036)       (2,046)
activities
                                                             
Profit for the period                                        
attributable
to members of the parent                                     
company
                               4,903           4,014         7,714
                                                             
Dividends on equity and                                      
non-equity shares              (1,068)         (826)         (2,464)
                                                             
Retained profit for the year   3,835           3,188         5,250
                                                             
Earnings per ordinary share    14.01p          11.56p        22.15p
                                                             
Diluted earnings per ordinary  13.38p          11.27p        21.11p
share

MORGAN SINDALL PLC
Interim Results for the six months to 30 June 1999

Group Balance Sheet (Unaudited)
                              
                                Unaudited      Unaudited        Audited
                                June 1999      June 1998       December
                                                                   1998
                                   £'000s         £'000s         £'000s
Fixed assets                                                
Intangible assets               9,934        3,244          3,970
Tangible assets                 11,065       11,668         11,384
Investment in joint venture     192          4              184
Investments                     935          500            690
                                22,126       15,416         16,228
                                                            
Current assets                                              
Stocks                          32,243       7,234          7,155
Debtors                         89,403       71,094         67,828
Cash at bank and in hand        24,716       17,444         28,386
                                146,362      95,772         103,369
                                                            
Creditors: amounts falling                                  
due within one year             (133,217)    (90,116)       (96,415)
                                                            
Net current assets              13,145       5,656          6,954
                                                            
Total assets less current       35,271       21,072         23,182
liabilities
Provisions for liabilities and                              
charges                         -            (346)          -
                                                            
Net assets                      35,271       20,726         23,182
                                                            
Capital and reserves                                        
Called up share capital         6,787        6,616          6,619
Share premium account           11,505       3,240          3,419
Revaluation reserve             2,620        2,289          2,620
Profit and loss account         14,359       8,463          10,524
                                                            
Total shareholders' funds       35,271       20,608         23,182
Equity minority interests       -            118            -
                                                            
Total capital employed          35,271       20,726         23,182
                                                            
Shareholders' funds are                                     
attributable to:
Equity shareholders' funds      30,336       15,670         18,247
Non-equity shareholders' funds  4,935        4,938          4,935
                                                            
                                35,271       20,608         23,182
                     
MORGAN SINDALL PLC
Interim Results for the six months to 30 June 1999
                              
Group Cash Flow Statement (Unaudited)
                              
                                  Unaudited    Unaudited        Audited
                                  June 1999    June 1998       December
                                                                   1998
                                     £'000s       £'000s         £'000s
                                                           
Net cash inflow/(outflow) from                             
operating activities              5,293        (3,072)     9,276
                                                           
Returns on investments and                                 
servicing of finance                                       
Interest received                 742          364         1,358
Interest paid                     (175)        (39)        (412)
Dividends paid to preference                               
shareholders                      (139)        (139)       (278)
                                  428          186         668
                                                           
Taxation                                                   
Corporation tax paid              (232)        (183)       (1,264)
                                                           
Capital expenditure and                                    
financial investment
Receipts from sale of fixed       283          5,679       6,687
assets
Payments to acquire fixed assets  (694)        (1,064)     (2,000)
Payments to acquire fixed asset                            
investments                       (245)        -           (190)
                                  (656)        4,615       4,497
                                                           
Acquisitions and disposals                                 
Purchase of subsidiary            (15,268)     (422)       (424)
undertaking
Net cash/(overdrafts) acquired    9            (888)       (888)
Sale of subsidiary undertaking    -            -           35
Net cash disposed                 -            -           (90)
                                  (15,259)     (1,310)     (1,367)
Equity dividends paid             (1,498)      (1,200)     (1,889)
Net cash (outflow) / inflow                                
before financing                  (11,924)     (964)       9,921
Financing                                                  
Issue of share capital, net of    8,254        22          79
expenses
Loans repaid                      -            (4,334)     (4,334)
                                                           
Net cash inflow/(outflow) from                             
financing activities              8,254        (4,312)     (4,255)
(Decrease)/increase in cash       (3,670)      (5,276)     5,666
                     
MORGAN SINDALL PLC
Interim Results for the six months to 30 June 1999
                              
Statement of Movements in Shareholders' Funds (Unaudited)
                              
                                  Unaudited    Unaudited        Audited
                                  June 1999    June 1998       December
                                                                   1998
                                     £'000s       £'000s         £'000s
                                                           
Opening shareholders' funds       23,182       17,398      17,398
Retained profit for the period    3,835        3,188       5,250
New shares issued                 8,152        -           124
Options exercised                 102          22          79
Surplus on revaluation            -            -           331
                                                           
Closing shareholders' funds       35,271       20,608      23,182
                              
                              
MORGAN SINDALL PLC
Interim Results for the six months to 30 June 1999
                              
Notes to the Interim Report
                              
1.     Analysis of turnover and operating profit.
                              
                    Unaudited Six      Unaudited Six        Audited year
                       months to         months to           to December
                     June 1999           June 1998               1998
             Turnover    Profit/    Turnover   Profit/     Turnover   Profit/
                        (losses)              (losses)             (losses)
                                                     
                                                                      
Regional                                                              
construction  139,118    1,033       114,269    938         254,600   2,102
Fit out       77,084     3,742       74,613     3,051       162,967   6,306
                                                                      
Construction                                                          
activities    216,202    4,775       188,882    3,989       417,567   8,408
Property      5,000      1,729       7,013      1,436       7,000     1,548
Group                                                                 
activities    -          (910)       -          (820)       -         (1,509)
              221,202    5,594       195,895    4,605       424,567   8,447

2.     Acquisition of Lovell Partnerships

On 16 June 1999 the Company acquired the entire issued share capital of
Lovell Partnerships Limited, Lovell Partnerships (Northern)
Limited and Lovell Partnerships (Southern) Limited ('Lovell
Partnerships').  £15 million was paid on completion representing
£9.2 million for the estimated net assets and £5.8 million for
goodwill.  The final consideration is expected to be close to £21
million.  Accordingly a £6 million accrual is included in the
balance sheet, which is expected to cover further consideration
to be paid and the write-down of assets to provisional fair
value.  In addition to the £5.8 million paid to the vendors for
goodwill there were costs of approximately £0.3 million, which
have been capitalised.  Goodwill capitalised is provisional and
will be subject to any subsequent adjustments to fair value of
the net assets acquired.

3.     Earnings per share

The calculation of the earnings per ordinary share is based on the
weighted average number of 33,994,000 ordinary shares in issue
during the year and on the profit for the year attributable to
ordinary shareholders of £4,764,000.

In calculating the diluted earnings per share, earnings are adjusted for
the preference dividend of £139,000 giving adjusted earnings of
£4,903,000.  The weighted average number of ordinary shares are
adjusted for the dilutive effect of the convertible preference
shares by 1,974,000 and share options by 676,000 giving an
adjusted number of ordinary shares of 36,644,000.

4.     Taxation

Taxation is charged at 22% being the estimated effective rate of taxation
for the period.

5.     Reconciliation of operating profit to net cash inflow/(outflow)
from operating activities

                                  Unaudited       Unaudited         Audited
                                 Six months      Six months         Year to
                                         to              to
                                  June 1999       June 1998    December 1998
                                     £'000s         £'000s            £'000s
                                                                  
Operating profit                      5,594          4,605        8,447
Depreciation of tangible fixed        750            695          1,507
assets
Amortisation of goodwill              104            69           191
Profit on disposal of business        -              -            (40)
(Profit)/loss on sale of fixed        (20)           179          (494)
assets
Decrease/(increase) in stocks and                                 
work in progress                      2,826          (664)        (285)
Increase in debtors                   (8,559)        (10,688)     (8,444)
Increase in creditors                 4,598          2,732        8,694
                                                                  
Net cash inflow/(outflow) from                                    
operating                             5,293          (3,072)      9,276
activities


6.     Reconciliation and analysis of net cash flow to movement in net
cash

                                June           December
                                1999               1998
                            Net cash           Net cash
                               £'000             £'000s
                                        
At 1st January 1999           28,386         18,386
Cash (outflow)/inflow         (3,670)        5,666
Cash outflow from financing   -              4,334
Cash at bank at 30 June       24,716         28,386
1999


7.     Interim Dividend

The interim dividend of 2.50p per share (1998: 2.05p) will be paid on 31
August 1999 to shareholders on the register at 20 August 1999.
The Ex-dividend date will be 16 August 1999.