Pre-close trading update

RNS Number : 2597E

Morgan Sindall PLC

17 December 2009

 



17 Dec 2009

Morgan Sindall plc

Morgan Sindall plc, the construction and regeneration group, provides the following period end trading update in advance of the announcement of its preliminary results for the year ended 31 December 2009, expected to be in late February 2010.

Trading

As previously announced in our Interim Management Statement on 10 November, Morgan Sindall remains on track to achieve its expectations for the current year, despite the challenging market conditions in which it is operating.

Fit Out is performing strongly in tough market conditions with margins remaining robust and it continues to see a recovery in the level of tendering activity.

Construction is still experiencing healthy demand from the public sector and, in particular, is currently advancing two major projects at preferred bidder stage, Tayside Mental Health (£100m) and Hull BSF (£200m). We expect to achieve financial close on these projects during the first quarter of 2010. There remains considerable uncertainty over future public spending commitments.

Infrastructure Services continues to perform well in reasonably buoyant market conditions and the division continues to progress a number of major opportunities. Although the bidding processes are proving more protracted than initially anticipated, we continue to await the outcome of preferred bidder decisions on a number of contracts.

Affordable Housing is still seeing a reasonable pipeline of refurbishment and new build social housing opportunities. This is complemented by improvements in demand for open market housing with sales continuing to improve.

Urban Regeneration's market remains subdued although we expect recovery in market conditions in the longer term.

The Investments division is seeing a strong pipeline of opportunities and we expect that it will increase its level of bidding activity in 2010, thereby taking advantage of the Group's increasing ability to deliver larger and more complex projects since the acquisition made in 2007.

Outlook

The Group's forward order book has reduced from £3.6bn to £3.2bn since 30 June 2009. However, this forward order book is supplemented by over £900m of projects at preferred bidder stage, all of which have been awarded during the second half of this year.

We remain mindful of the challenges facing the sector in the longer term and continue to shape our business accordingly. Each of our divisions continues to particularly focus on cash management, cost reduction and supply chain improvements, as well as responding to market growth opportunities where they present themselves.

In summary, Morgan Sindall is on track to meet our expectations for 2009 and is well placed to meet the challenges and opportunities in 2010.

Enquiries:

Morgan Sindall plc	Tel: [phone]
Paul Smith, Chief Executive
David Mulligan, Finance Director
Blythe Weigh Communications	Tel: [phone]
Tim Blythe	Mob: [phone]
Paul Weigh	Mob: [phone]

 

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