Annual Financial Report

Morgan Sindall Group PLC

24 March 2026

 

Morgan Sindall Group plc ('the Company')

Annual Financial Report

24 March 2026

Further to the release of the Company's Preliminary Results announcement on 25 February 2026, the Company announces that it has today published and issued to shareholders the 2025 Annual Report and Accounts ('Annual Report'), Notice of Annual General Meeting 2026 and Form of Proxy.  In addition, it has published its 2025 Responsible Business Data Sheet, 2025 Gender Pay Gap Report and 2025 Modern Slavery and Human Trafficking Statement. The following documents can be downloaded from the Company's website:

·       2025 Annual Report - https://www.morgansindall.com/investors/reports-and-presentations

·       Notice of Annual General Meeting 2026 - https://www.morgansindall.com/investors/annual-general-meeting  

·       2025 Responsible Business Data Sheet - https://www.morgansindall.com/investors/reports-and-presentations

·       2025 Gender Pay Gap Report - https://www.morgansindall.com/investors/governance

·       2025 Modern Slavery and Human Trafficking Statement - https://www.morgansindall.com

The Annual Report has been prepared using the single electronic reporting format required by the Transparency Directive Regulation.  The Annual Report, Notice of Annual General Meeting and Form of Proxy in unedited full text have been submitted to the Financial Conduct Authority's national storage mechanism ('NSM') and will shortly be available via the NSM website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

The Company will hold its Annual General Meeting (AGM) at 10.00am on Thursday, 7 May 2026 at the offices of Morgan Sindall Group plc, Kent House, 14-17 Market Place, London W1W 8AJ. 

We are looking forward to seeing shareholders at the AGM in person.  The Company will notify shareholders of any changes to the AGM via a Regulatory Information Service and on the AGM page of the Company's website.  We encourage shareholders who cannot attend the meeting to submit any questions on the business of the AGM in advance of the meeting by email to [e-mail] (marked for the attention of the General Counsel & Company Secretary).  We will endeavour to publish (on an anonymised basis) any questions received before 10.00am on Tuesday, 5 May 2026 and our responses to those questions on our website prior to the AGM.  Following the AGM, we will publish on our website (on an anonymised basis) the full set of questions received including those received after 10.00am on Tuesday, 5 May 2026 and our answers to those questions.  However, we reserve the right to edit questions or not to respond where we consider it appropriate, taking account of our legal obligations.

In accordance with the requirements of Rules 4.1 and 4.1.8 of the Disclosure Guidance and Transparency Rules, a description of the principal risks and uncertainties affecting the Group is set out in Appendix 1 to this announcement. The Company's Preliminary Results announcement released on 25 February 2026 contained all other information required by DTR 6.3.5.

ENQUIRIES:    

Morgan Sindall Group plc                                                                   Tel: [phone]

Lisa Minns, General Counsel & Company Secretary

Appendix 1

We have a clear governance framework in place for managing risk throughout our operations Our risk governance model ensures that our principal risks and robust internal controls are under regular review at all levels.

Our operational teams are highly skilled in their fields and valued for their ability to identify and manage the risk embedded in our

day-to-day operations. Their mix of knowledge and experience is invaluable at all key stages, from project selection, through

bidding to project delivery. A detailed system of delegated authorities allows our people the ability to perform while at the

same time being responsible and accountable for their actions through our decentralised business model. Our senior management teams at divisional and Group level, aided by our internal reporting process, maintain oversight to ensure that all decisions and actions remain in line with our expectations and risk appetite.

Principal risks

Our principal risks are those we consider the most significant in terms of potential impact to the business and have been extensively reviewed. The Board recognises that our culture is essential to our success as a decentralised business, as is ethicality, legal compliance and adherence to relevant standards and regulations.

In its annual review of the Group's risk appetite, the Board noted that our markets remain structurally secure. Our business model continues to be supported by strong levels of investment from the public, private and regulated sectors, particularly in partnership developments, commercial office fit out, critical infrastructure, schools, health and other construction-related activity.

The Board considered the increasing threat posed by cyber attacks and the need to maintain robust cyber security defences and appropriate business continuity planning arrangements. Over the past year, challenging market conditions and subdued consumer confidence have continued to impact the private housing market. Elsewhere, uncertainty in the wider macroeconomic landscape has been impacted by ongoing global conflicts and rising tariffs. The Group's strong financial health and current strategy make it well positioned to navigate these issues, with the Board monitoring them closely during 2026 and appropriate action being taken should the need arise.

Strategic risk

A.    Economic change and uncertainty
Risk description	Update on risk status	Mitigation	Change in risk
Growth and investor and market confidence are vulnerable to ongoing uncertainties. There could be fewer or less profitable opportunities in our chosen markets, including a decline in construction activity caused by macroeconomic shifts and/or reduced demand for our developments. Allocating resources and capital to declining markets or less attractive opportunities would reduce our profitability and cash generation.	· Sustained operational delivery, a high-quality order book and a strong balance sheet underpin our competitive position in our sectors and give confidence to our clients, employees and supply chain. · The diversity of our operations together with the high-quality secured order book and preferred bidder status achieved across all of our divisions provide a level of insulation against difficult market conditions, with Construction in particular delivering a robust performance and Fit Out significantly exceeding expectations. · The government is continuing to invest in areas that complement our strategy, including affordable housing, education, health, critical infrastructure and town regeneration. · In a volatile market, our strong balance sheet allows us to remain agile, continue to take long-term decisions and respond to opportunities.	· Our business model is designed to provide a mix of earnings across different market cycles. The diversity of our operations protects against fluctuations in individual markets while our decentralised approach enables our divisions to respond quickly to change. · The Board regularly reviews the economic environment to assess whether any changes to the outlook justify a reassessment of our risk appetite or business model. · We stress-test our business plan against the current economic outlook to ensure our financial position is sufficiently flexible and resilient. · We are strategically focused on a high-quality order book underpinned by a strong balance sheet and financial strength. · A high proportion of our secured workload is with public sector and regulated entities via long-term arrangements, with a healthy level of demand and typically preferential terms. · We continue to be very selective, and our procurement routes, margins, contract terms and secured workload remain favourable.	Stable Responsibility The Board Strategic priority ·    Achieve quality of earnings ·    Secure long-term workstreams ·    Maintain financial strength

Strategic risk

B.    Exposure to the UK residential market
Risk description	Update on risk status	Mitigation	Change in risk
The UK housing sector is strongly influenced by government stimulus and consumer confidence. Inflationary and interest rate pressures could challenge scheme viability, slowing down decision-making and project commencement. If mortgage availability, affordability or consumer confidence is reduced, this could impact on demand and make existing schemes difficult to sell and future developments unviable, reducing profitability and tying up capital.	· While inflation and interest rates have been generally falling, with an improvement in mortgage availability, uncertainty remains in the market and affordability for first-time buyers is impacting demand. · In these challenging open market conditions, our business model has enabled us to pivot to contracting activities for affordable housing with largely public sector clients, to help mitigate the risk. · In Mixed Use Partnerships, there are short-term viability challenges to navigate due to build cost pressures. Our model and expertise allow us to work through this with our partners and, where necessary, seek additional grant funding and sources of finance with better terms. · Constrained planning remains slow, despite the government's planned reforms to address the issue, and has the potential to delay our schemes. In the medium to long term, improvements in the system will enable further efficiencies and increase the speed at which we bring developments forward.	· A rigorous three-stage formal appraisal process is undertaken before committing to development schemes and capital commitments. · We work closely with public sector partners and government agencies such as Homes England to secure extra development funding if required. · On selected large-scale residential schemes, we seek to forward sell and/or fund sections to targeted institutional investors to reduce risk. · Our residential portfolio has a wide geographical spread, protecting against regional market variations, and is geared towards providing an affordable product. · Rather than building up a land bank, we target option agreements with landowners that limit and/or defer long-term exposure and boost return on capital employed. · We regularly monitor and forecast our pipeline of development opportunities and secured workload, which includes monitoring key UK statistics such as unemployment, lending and affordability. · For a large proportion of current schemes, we have the ability to slow (or accelerate) build rates should the need arise. · Our partnership model provides resilience by allowing us to flex scheme phasing, timing, tenure mix and funding structures to suit varying market scenarios. The model can be de-risked by increasing the proportion of contracting work in Partnership Housing, forming strategic joint ventures and increasing the proportion of affordable units.	Stable Responsibility The Board, executive directors and divisional senior management teams Strategic priority ·    Achieve quality of earnings ·    Secure long-term workstreams ·    Maintain financial strength

Operational risk

C.    We cause a major health and safety incident and/or adopt a poor safety culture
Risk description	Update on risk status	Mitigation	Change in risk
Our first priority is to protect the health, safety and wellbeing of our key stakeholders and the wider public. Health and safety will always feature significantly in the risk profile of a construction business as we carry out a significant portion of our work in public areas and complex environments. Accidents could result in legal action, fines, insurance claims, delays and, in the worst case, a fatality. Poor health and safety performance could also impact our reputation and ability to secure future work.	· Our overall health and safety performance data has improved compared with previous years. However, our vigilance and commitment to high health and safety standards remain and we continually look for ways to drive improvement. · In 2025, our Group protecting people forum continued to meet monthly to share learnings, review trends and insights from accidents and also consider policies and standards.	·  The Board is responsible for health and safety and it is a key topic for discussion at every Board meeting. ·  Individuals in each division and on the Board are given specific ·  responsibility for health and safety matters. ·  Our Group protecting people forum meets regularly, with representatives from all divisions sharing best practice and exchanging information on emerging risks. ·  Safety leaders from across the divisions hold monthly meetings focusing on addressing and learning from issues and opportunities as they arise. ·  We have a well-established health, safety and wellbeing framework in place which is reviewed annually to ensure it remains fit for purpose. The framework includes policies, risk assessments and method statements, regular communications, leadership site visits and audits. ·  We report on the implementation of leading indicators and monitor and report near-miss incidents and incidents that could potentially have resulted in serious injury. Any incidents are investigated and root causes analysed. ·  Our regular health and safety training includes behavioural change, housekeeping on site, and leadership engagement in driving site standards. ·  Each division's health and safety policy is communicated to all its employees, and senior managers are appointed to ensure the policies are implemented. ·  We have major incident management and business continuity plans in place, which are periodically tested and reviewed. ·  All divisions are accredited to ISO 45001 for occupational health and safety. ·  We continue to offer our colleagues a range of benefits that promote physical and mental wellbeing.	Stable Responsibility The Board, senior management teams, protecting people forum Strategic priority ·    Secure long-term workstreams ·    Deliver on our Total Commitments

People risk

D.   We fail to attract and retain the talent we need to maintain and grow the business
Risk description	Update on risk status	Mitigation	Change in risk
If we fail to attract and retain the talent required to excel in project delivery and meet our clients' and other stakeholders' expectations, this could damage our reputation and our ability to secure future work and meet our targets. Skills shortages in the construction industry will remain an issue for the foreseeable future.	· Our current success is helping us attract and retain people. Our voluntary staff turnover rate was 10% in 2025, compared with 11% in 2024. · We have ambitious growth plans and recognise that we will need to recruit and retain a quality workforce to achieve our targets, facing competition from peers and against the backdrop of an ageing population working in the industry. · We remain focused on providing new employees with a robust onboarding and induction programme, covering our decentralised structure, culture and values, development programmes and wider wellbeing and benefits packages. · We are responding to the challenge of an ageing employee population through succession planning, promoting from within, and investing in training. · We are also continuing with our work to improve our inclusion and diversity. · It is recognised that the sector as a whole has work to do in terms of attracting talent and being the first choice for young people.	·  We empower our people through our decentralised business model and give them responsibility together with clear leadership and support. ·  We offer them a strong Group culture and attractive benefits, working environments, technology and wellbeing initiatives to help improve their working lives. ·  We conduct employee engagement surveys and monitor joiner and retention metrics, including voluntary staff turnover. ·  We carry out annual appraisals that provide two-way feedback on performance, and conduct exit interviews when people leave. ·  Our succession planning includes identifying and developing skills needed for the future. ·  We provide training and development to build skills and experience, such as our leadership development and graduate, trainee and apprenticeship programmes.	Stable Responsibility The Board, divisional senior management teams Strategic priority ·    Secure long-term workstreams ·    Excel in project delivery ·    Deliver on our Total Commitments

Financial and operational risk

E.    Partner insolvency or other performance and compliance issues
Risk description	Update on risk status	Mitigation	Change in risk
Poor selection and inadequate due diligence could lead to the insolvency of a key client, subcontractor, joint venture partner or supplier, delaying project works and incurring the costs of finding a replacement. Appointing partners with the wrong behaviours could lead to quality issues, or safety or other serious compliance breaches.	· Following some well-publicised failures in the mainstream contractor market, supply chain insolvency risk has largely been contained. · Some partners may have been trading with stretched finances following the pandemic, the unwind of government measures introduced to support business recovery, the VAT reverse-charge initiative and, more recently, employers' National Insurance increases. · Where supply chain failures have occurred, they have been disruptive but manageable, with costs being absorbed at project level by utilising contingency and/or, in a small number of instances, a reduction in margin which has not been material to the Group. · We have nurtured close relationships with our supply chain as part of a long-term strategy, sharing our values and desired behaviours, so that we can provide an offering our clients can rely on to deliver a quality product compliant with relevant building standards, laws and regulations.	·  Our business model and order book are predominantly focused on the public sector, regulated industries and commercial customers in sound market sectors, reducing the likelihood of a material customer failure. ·  We carry out rigorous due diligence preconstruction, particularly on commercial clients and key supply chain partners, including a focus on payment behaviours, cash terms and profiling, and likely liquidity outcomes. Where necessary, we may obtain additional security in the form of guarantees, bonds, escrows and/or more favourable payment terms, or, in some cases, decline a project. ·  Formal due diligence is carried out when selecting joint venture partners, including seeking protection in the event of default by one of the partners. Joint ventures require executive director approval. ·  We work with preferred or approved suppliers where possible, which aids visibility of both financial and workload commitments. We use supply chain credit checks but the information is somewhat historical. Our relationships with our suppliers mean we can monitor the situation in real time, by gaining transparency and understanding their levels of exposure, and our operational teams are highly alert to early signs of stress. This gives us a better chance of stepping in if needed. ·  Our strategy has been to reduce payment days, and our supply chain partners regard us as dependable and responsible. We do not hold cash in the form of retention from our preferred supply chain partners, which helps reduce their cash flow pressures and likelihood of failure. ·  Our business model reduces the concentration of supply chain risk as our divisions operate in different markets and geographical regions, using local supply chains. ·  Our predominantly negotiated and two-stage procurement routes1 allow us to select appropriate supply chain partners for our projects. This enables predictable outcomes for the Group, our clients and our supply chain. ·  We rigorously monitor work in progress, debts and retentions.	Decrease Responsibility The Board, divisional senior management teams Strategic priority ·  Excel in project delivery ·  Maintain financial strength

1 Negotiated and two-stage procurement routes allow us early engagement in the project and greater visibility, influence and certainty over pricing and programming.

Financial risk

F.    Inadequate funding
Risk description	Update on risk status	Mitigation	Change in risk
A lack of liquidity could impact our ability to continue to trade or restrict our ability to achieve market growth or invest in partnership schemes.	·  The Group has £180m of undrawn committed revolving credit facilities, which have been extended to 2028. ·  During the reporting period and for the foreseeable future, our average net daily cash continues to be healthy and supports the strong conversion of Group profits to cash as we continue to invest in partnership activities. ·  Our balance sheet provides assurance to our stakeholders, allowing us to continue investing in partnership schemes while remaining selective in construction.	·  We have a Group-led disciplined capital allocation process for significant project-related capital, which takes into consideration future requirements and return on investment. ·  We monitor our cash levels daily and conduct regular forecasting of future cash balances and facility headroom. ·  Our long-term cash forecasts are regularly stress-tested.	Stable Responsibility Executive directors, Group tax and treasury director, divisional senior management teams Strategic priority ·    Maintain financial strength

Financial risk

G.   Mismanagement of working capital and investments
Risk description	Update on risk status	Mitigation	Change in risk
Poor management of working capital and investments leads to insufficient liquidity and funding problems.	·  As a result of a subdued housing market, we have seen work in progress levels increase on a small number of our open market developments, which we continue to monitor closely. ·  Our ongoing focus on working capital management has enabled us to maintain levels similar to prior years while maintaining payment practices that are favourable to our supply chain. ·  Our strong balance sheet and cash position continue to support investment in strategic partnership schemes and protect against economic downturn, allowing us to make the right long-term decisions. ·  Our cash position is not supported by any form of supply chain debtor finance and gives a clear indication of our financial health. ·  We continue to maintain a positive momentum in cash management in construction due to a combination of improved returns, cash optimisation and cash conversion. ·  Our average net daily cash for the period demonstrates our disciplined working capital management.	·  Our delegation and limits of authority procedures require that capital and investment commitments are notified and signed off at key stages with the relevant senior-level approval. ·  The divisions have robust cost-value reconciliations in place at project level which are updated monthly and provide visibility of work in progress. Management review meetings focus on overdue work in progress, debtors and retentions. ·  We reinforce a culture in our bidding and project teams of focusing on cash returns to ensure they meet expectations. ·  We monitor cash levels daily and produce regular cash forecasts. ·  We manage our capital on partnership schemes efficiently, for example through phased delivery, institutional and government funding solutions, and forward funding where possible.	Increase Responsibility Executive directors, divisional senior management teams Strategic priority ·    Maintain financial strength

Operational risk

H.   Poor contract selectivity
Risk description	Update on risk status	Mitigation	Change in risk
In a volatile market where competition is high, a division might accept a contract outside its core competencies or for which it has insufficient resources. If a contract is incorrectly bid, this could lead to contract losses and an overall reduction in gross margin. It might also damage our relationship with the client and supply chain, leading to a reduction in work volumes. There is also a risk that we fail to win sufficient profitable work to achieve our targets.	·  Our order book consists of a high proportion of public sector and regulated-industry clients with typically healthier risk profiles and is secured in limited competition, allowing us to continue selecting the right projects. ·  We have not changed the sectors or markets we operate in and are therefore unlikely to engage in a project outside our capability. Generally, we avoid tendering for single-stage, fixed-price, lump sum work. ·  Input cost pressures have eased, with newer projects benefiting from more realistic client budgets and greater pricing stability in the supply chain. However, client budgets, while more aligned to inflation, remain stretched, which results in extended preconstruction periods. ·  We continue to maintain sensible contingency levels, and some contracts contain mechanisms for passing through inflationary costs, particularly on the essential and critical infrastructure work we carry out.	·  It is part of our strategy and culture to be selective in our work by targeting optimal markets, sectors, clients and projects. ·  We limit our participation in open market bids, securing a large proportion of our projects via framework or partnership arrangements with repeat clients who share our values. This provides a high probability of predictable and successful outcomes. ·  When bidding, we aim for negotiated and two-stage procurement routes that allow us early engagement and collaboration, including the early identification of the most appropriate supply chain delivery partners. ·  Our divisions select projects according to pre-agreed types of work, project size, contract terms and risk profile. A multi-stage process of bid review and approval includes tender review boards, risk profiling and a system of delegated authorities to ensure approval at appropriate levels of management. ·  We profile the skills and capabilities required for the project to ensure that we allocate the right people. ·  Our divisions have processes in place to select supply chain partners who match our expectations in terms of quality, sustainability and availability. ·  We conduct a robust review of our pipeline and bids at key stages, including rigorous due diligence and risk assessment, and obtain senior level approval in accordance with the Group's delegation and limits of authority procedures.	Stable Responsibility Executive directors, divisional senior management teams Strategic priority ·    Achieve quality of earnings ·    Excel in project delivery ·    Secure long-term workstreams ·    Maintain financial strength

Operational risk

I.     Poor project delivery
Risk description	Update on risk status	Mitigation	Change in risk
Failure to deliver projects on budget and on time that meet client expectations could incur costs that erode profit margins, lead to the withholding of cash payments and impact working capital. It may also result in reduction of repeat business and client referrals. Changes to the scope of works and contract disputes could lead to costs being incurred that are not recovered, loss of profitability and delayed receipt of cash. Not understanding the project risks may lead to poor delivery and could result in reputational damage and loss of opportunities. Ultimately, we may need to resort to legal action to resolve disputes, which can prove costly with uncertain outcomes as well as damaging relationships.	· Inflationary pressures have eased and newer projects are benefiting from client budgets more aligned with the impacts of inflation; however, in some instances it can take time to remodel a scheme to ensure it is viable and this can lengthen the preconstruction period. · There is a recognised shortfall in the construction labour market, exacerbated by impacts from Brexit. However, in the short term, while we have seen issues, we are managing the situation with our supply chain. · We have responded to the Building Safety Act, which primarily deals with building regulations and fire safety, with Construction, Partnership Housing and Mixed Use Partnerships having updated their methodology to ensure that project specifications remain compliant. This includes a complete refresh of design management and procedures and increased on-site scrutiny and records, as well as engagement of independent fire consultants on more complex schemes. · We continue to actively engage with the Ministry of Housing, Communities and Local Government with regard to the Building Safety Act, and have committed to rectifying issues with appropriate remedial activity, which is being undertaken and expenditure provided for. Some of this may be recoverable, but will take time to resolve.	· Our focus on project selectivity, the quality of our order book and our close engagement with our supply chain partners help reduce the probability of poor performance. · We have well-established systems of measuring and reporting project progress and estimated outturns through robust project cost-value reconciliations that take into account contract variations and their impact on programme, cost and quality, with management review meetings to closely monitor performance. · The strength of our supply chain relationships and preference to work with selected partners reduces the probability of project failure and helps to ensure we deliver predictable outcomes. Maintaining good supply chain relationships has helped us navigate labour and/or materials availability issues. · Where legal action is necessary, we notify the Board, take appropriate advice and make suitable provision for costs. · A programme of internal project audits is used to highlight areas of improvement and share best practice and lessons learned. · Various Perfect Delivery1 initiatives focus on improvements in product quality and predictability as well as the client experience. · Regular formal and informal stakeholder feedback allows us to intervene when required and refine our offering to provide exceptional outcomes. · We continue to use and enhance our digital project management tools and commercial metrics that highlight areas for focus and provide early warnings, enabling early intervention in the construction cycle.	Stable Responsibility Executive directors, divisional senior management teams Strategic priority ·    Achieve quality of earnings ·    Excel in project delivery ·    Secure long-term workstreams ·    Maintain financial strength

1 Perfect Delivery status is granted to Fit Out, Construction and Infrastructure projects that meet all four client service criteria specified by the division.

Operational risk

J.     Cyber attack
Risk description	Update on risk status	Mitigation	Change in risk
The Group, one of its divisions or a supplier could become the victim of a cyber attack, leading to potential sensitive data loss, loss of key systems, fines, prosecution and, in a worst case, the inability to do business.	· In response to an increasing number of cyber attacks on UK businesses, we have elevated our cyber security posture. · We have re-certified to ISO 27001, the government's Cyber Essentials Plus, Secure by Design and were the first organisation to be certified under the new Ministry of Defence Cyber Certification scheme. · We have continued to enhance our visibility of security events and 'indicators of compromise'. · The Board has agreed a rolling security strategy, supported by continuous improvement and review. This ensures we remain aware of emerging risks and changes to the threats we face. · We have continued to run workshops hosted by industry experts to educate key stakeholders around incident response best practices, focusing on business, technical and legal impacts of a major incident. We have increased the number of network and systems penetration tests that we undertake on an annual basis. · Data/business intelligence, digital construction and AI are at the forefront of our technology investment. To support the seamless delivery of these new technologies, we have also delivered our next-generation, modern data network. This improves the security of our network and enhances access to cloud services. · We have continued to invest in cloud platforms to expand functional capabilities and resilience and have prepared for the expected acceleration to cloud-hosting away from data centres on the premises.	·  We have a dedicated Group team focused on providing a stable and resilient IT environment. Our Group head of information security and compliance presents an update to the Board on a biannual basis to ensure oversight and challenge. ·  Our IT security steering group provides governance and oversight of the Group's cyber strategy, resources and funding. ·  We have business continuity and disaster recovery plans in place, which were reviewed during the year. ·  We adopt best practices to secure our people and data. Endpoint protection tools are deployed and monitored to safeguard devices from malware, unauthorised access and data breaches. Multi-factor authentication is applied to enhance security and prevent unauthorised access from our devices and key systems. ·  We commission an external industry expert to conduct regular cyber risk analysis on devices used on our network. The data collected is independent of our other security systems and acts as an audit of our security controls and their effectiveness. ·  We engage with industry-leading partners to adopt appropriate technologies to protect the Group. ·  We run regular audits using different parties (both technical and nontechnical) to confirm that our controls remain effective. Audit reports are shared with the IT security steering group. ·  We train all our employees in data protection and information security, including awareness and responsibilities. ·  We follow the National Cyber Security Centre's guidance on third-party risk management and perform ongoing risk assessments of our digital supply chain partners.	Increase Responsibility The Board, divisional senior management, IT security steering group (reporting to the chief financial officer) Strategic priority ·    Achieve quality of earnings ·    Excel in project delivery ·    Secure long-term workstreams ·    Maintain financial strength

Operational and financial risk

K.    Climate change
Risk description	Update on risk status		Mitigation	Change in risk
More extreme weather events could impact our operations through increased costs, project delays and supply chain disruption. Limited advances in technology and issues with data availability and accuracy could impact our ability to take effective action in response to climate change and result in slower progress towards our carbon reduction targets. Changes to environmental or climate legislation could lead to increased project costs and potential compliance breaches if we do not manage this risk effectively.		·  Momentum behind climate and social value action remains significant across the Group, with clients requesting more information and evidence of activity in tenders to win work. ·  While the timing, status and metrics used to identify climate-related risks and opportunities remain unchanged from 2024, mitigating actions have been updated in our Task Force on Climate-related Financial Disclosures (TCFD) statement to reflect initiatives and progress made across the Group in 2025.	·  The Group adheres to the 11 recommendations of the TCFD and has commenced alignment to the International Sustainability Standards Board (ISSB) IFRS S2 Climate-related Disclosures. ·  A Group double materiality assessment was undertaken in 2025 to evaluate sustainability topics from two perspectives: (i) the impact they have on society and the environment and (ii) the business risks and opportunities that arise from them (see page [35] for more detail). The process reconfirmed net zero, energy use and climate as a material issue, which will drive continued strategic action around climate change risk and mitigation. We have a Group-wide carbon reduction plan in place that includes science-based targets. In addition, each division has its own KPIs and action plans and provides updates on progress at quarterly climate action panel meetings. ·  A central data platform has been established to ensure continued effectiveness of ESG data, capture and quality. ·  Divisional environmental and social value leads help to collate and coordinate data and implement relevant climate initiatives. ·  Our carbon and social value data is subject to internal and independent external validation.	Stable Responsibility ·  Executive directors, divisional senior management teams Strategic priority ·  Secure long-term workstreams ·  Deliver on our Total Commitments

 

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