Trading Update

RNS Number : 1885O

Morgan Sindall Group PLC

03 November 2016

 

3 November 2016

Morgan Sindall Group plc

Trading Update

Morgan Sindall Group plc ('the Group') today announces a trading update for the period from 1 July 2016 to date.

The positive momentum across the Group in the first half of the year has continued with strong trading and further growth in the order book. As such, the Group is on track to deliver full year results in line with its expectations which were set at the time of the half year results on 2 August 2016. The EU Referendum result has had no noticeable impact on the performance of the business.

In addition, a further strong cash performance means that the Group now expects to be in an average daily net cash position for the year, ahead of previous guidance.

The Group's committed order book as at 30 September 2016 was £3.2bn, up 15% from the year end position (up 3% from the half year position) whilst the regeneration & development pipeline remained broadly level at £3.2bn.

Construction Activities

·    Construction & Infrastructure has benefited from its higher quality order book and its focus on operational delivery which have supported the further gradual improvement in performance.

·    Fit Out has again delivered further margin progression ahead of its first half performance.

·    Property Services has focused on the delivery of its more recent contract wins announced in the first half and is on track deliver a modest profit for the year.

Regeneration Activities

·    Partnership Housing has been active on construction to secure fourth quarter completions in its mixed-tenure business which will deliver the expected accelerated growth in the second half. The division has seen a sizeable increase in its dialogue with Local Authorities and Housing Associations on opportunities for future land and development partnerships. These are yet to be reflected in the pipeline.

·    Urban Regeneration has benefited from the practical completion of a significant proportion of the second residential block of the first phase of its Lewisham Gateway development, whilst all its other active development schemes continue to make good progress, in line with expectations.

Investments continues to work closely with other divisions to secure high quality construction and regeneration opportunities.

The Group's cash performance has been strong. From 1 July to 31 October, the Group has been in an average daily net cash position of £48m and from the start of the year to 31 October, the average daily net cash was £5m. This significant improvement has been due to a combination of factors: ongoing improved working capital management; earlier than expected completions on some regeneration schemes; and the revised phasing of certain regeneration scheme investments in the ordinary course.

Based upon this, the Group is now expected to show average daily net cash for the year in excess of £5m. This is significantly better than previous guidance as set out at the time of the half year results of average daily net debt being no greater than £45m and compares to average daily net debt of £53m in the prior year.

As of close of business on 31 October, the Group had net cash of £78m. 

John Morgan, Chief Executive, said

"The positive momentum across the Group in the first half of the year has continued with strong trading and further growth in the order book, with no noticeable impact from the EU Referendum result. As such, the Group is on track to deliver full year results in line with its expectations which were set at the time of the half year results on 2 August 2016.

All divisions are contributing to this performance. We continue to build a high quality order book in our Construction activities, whilst our long term investment in Regeneration means we have a strong and sustainable pipeline. The cash performance of the Group has been strong and we now expect to be in an average daily net cash position for the year, ahead of previous guidance."

The Company is hosting an evening reception for financial analysts and institutional investors in London on 22 November 2016 where there will be an opportunity to meet with divisional management. For further information, please contact Jo Howe ([e-mail]).  

ENDS

Morgan Sindall Group

Morgan Sindall Group plc is a leading UK construction and regeneration group with revenue of c£2.4 billion, employing around 5,700 employees and operating in the public and commercial sectors.  It operates through six divisions of construction & infrastructure, fit out, property services, partnership housing, urban regeneration and investments.

ENQUIRIES:

Morgan Sindall Group Tel:                           020 7307 9200                       

John Morgan, Chief Executive

Steve Crummett, Finance Director

Brunswick Tel:                                                020 7404 5959

Jonathan Glass

Alison Kay

 

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