Pre Close Trading Statement
Morgan Sindall PLC
13 December 2007
Morgan Sindall plc
Pre-close Trading Update
The Board of Morgan Sindall today announces a trading update, prior to its close
period, for the year to 31 December 2007. The Group's preliminary results will
be announced in February 2008.
Trading
The Group continues to perform in line with management expectations for the
current year and the positive outlook for 2008 across all our business areas
remains unchanged.
The Fit Out division is continuing to secure contracts across all market sectors
and in particular from the financial services sector. Tender enquiry levels
remain buoyant and management remains of the view that the outlook for 2008 is
for similar levels of activity to those of the current year. The order book is
currently at a comparable level to that at the same stage last year giving
management an informed view on the market for the next six months.
The construction market has steadily improved during the year and the
Construction division is seeing strong growth in its revenue as a result of both
organic growth and the acquisition of the Design and Project Services business
from Amec in July this year. The division continues to focus on key clients and
contracts, such as local authority frameworks, which give it greater longer term
visibility.
Infrastructure Services' market outlook remains positive with key projects
secured last year continuing to progress well and it is anticipated that margins
will recover to close to 2% for the full year, with further progression
anticipated next year.
Affordable Housing's margin is again expected to be ahead of that in previous
years, on revenue at a similar level to 2006. The division continues to see a
healthy pipeline of mixed-tenure and Decent Homes opportunities and the outlook
for the affordable housing market is positive as it remains a key Government
priority.
Following its acquisition in July, Development is trading in line with our
expectations and the opportunities for the division remain encouraging. With its
focus on long term strategic partnership arrangements, predominately through PPP
structures, the division is particularly well placed with a secure forward
development programme with minimal exposure to the revaluation issues currently
affecting the property sector. The pipeline has been significantly strengthened
by the division's appointment to preferred bidder status on various regeneration
schemes at Swindon, Doncaster, Blackpool and Manchester Victoria during the
year.
Overall the forward order book stands at £4.2bn compared to £3.3bn at the start
of the year and a modest increase over the position at June. This represents an
underlying increase of 11% on the start of the year after excluding the impact
of the order book relating to the acquisition. Average cash balances have been
particularly strong throughout the second half of the year. The current
performances of our divisions and the growing order book underpin our view that
there is sustained strength in the construction and regeneration markets in
which we operate and that the outlook for the Group remains positive.
Enquiries:
Morgan Sindall plc Tel: 020 7307 9200
Paul Smith, Chief Executive
David Mulligan, Finance Director
Blythe Weigh Tel: 020 7138 3205
Tim Blythe
Paul Weigh
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