Pre-close trading update
Morgan Sindall Group plc
2 July 2010
Pre-close trading update
The Board of Morgan Sindall Group today announces its trading update for the six months to 30 June 2010. The Group's interim results will be announced on Monday 9 August 2010.
The Group's positive start to the year has continued and we remain on track to meet our expectations for the current year with improvements in underlying trading expected to offset the estimated £2m net cost of the integration of the Construction and Infrastructure Services divisions in the current year.
Construction & Infrastructure
We have combined our Construction and Infrastructure Services divisions to create a single, enlarged division trading under the Morgan Sindall brand name. The new division, Construction & Infrastructure, has been created primarily to deliver a more integrated service to a number of clients who procure both civil engineering and building work.
In construction the division's strong start to the year has continued. It has won a good level of new business with some notable contracts being secured including, most recently, the Tayside Mental Health PFI. However, uncertainties remain about the precise impact of the planned cuts in public spending and the Group continues to monitor the situation closely and to develop contingency plans accordingly.
Demand from our infrastructure markets for the first half of the year was, as expected, lower than the comparative period last year largely due to the transition from AMP4 to AMP5 in the water sector and delays in the award of some major infrastructure projects.
The Construction & Infrastructure division has successfully converted all of its preferred bidder opportunities (£0.9bn) since the start of the year. Consequently, its outlook remains robust with the forward order book increasing by around a quarter since the start of the year along with a healthy pipeline of major construction and infrastructure opportunities still being pursued.
Fit Out
Fit Out has benefitted from improved market conditions driven in particular by demand for larger projects, with revenue increasing by around 10% in comparison to the same period last year. Revenue for the second half of the year is expected to exceed that achieved in the first half. The division's short term outlook remains healthy with the order book increasing by around a third since the start of the year although we expect market conditions to be very competitive in the second half of this year.
Affordable Housing
Affordable Housing's trading in the first half of the year was in line with the same period last year with demand for new build social housing and refurbishment remaining firm. Market conditions for open market housing are slowly improving but demand remains subdued, constrained by the lack of mortgage availability. The outlook remains unchanged with the forward order book being in line with the level at the start of the year.
As announced on 30 June the division has extended its planned and responsive maintenance capability with the acquisition of Powerminster Gleeson Services.
Urban Regeneration
As expected, Urban Regeneration's market remains subdued due to low levels of occupier demand for commercial property. The division continues to progress its major regeneration schemes and remains on track to make a modest profit for the half and full year.
Investments
The Investments unit has been successful in closing Hull BSF and Tayside Mental Health PFI during the first half of the year and continues to pursue a number of opportunities in the health and education sectors.
The Group's financial position remains strong, with net cash at the half year expected to be more than £100m and average cash for the six months significantly above market expectations. The Group's forward order book currently stands at £3.5bn, compared with £3.2bn at the start of the year. We have had a positive first half of 2010 and with our broad sector spread we remain well positioned to face the challenges ahead and to benefit from opportunities as they present themselves.
Ends
Notes to Editors:
Morgan Sindall Group plc is a leading UK construction and regeneration group operating through four divisions of fit out, construction and infrastructure, affordable housing and urban regeneration, which are supported by a specialist investment unit.
ENQUIRIES:
Morgan Sindall Group plc Tel: 020 7307 9200
Paul Smith, Chief Executive
David Mulligan, Finance Director
Blythe Weigh Communications Tel: 020 7138 3204
Tim Blythe Mobile: 07816 924626
Paul Weigh Mobile: 07989 129658
This information is provided by RNS
Latest directors dealings
- 1 minute ago MJ Gleeson
- 3 minutes ago Rolls-Royce Holdings
- 37 minutes ago Crest Nicholson Holdings
- 1 hour ago Naked Wines
- 1 hour ago Greencoat UK Wind