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Morgan Sindall Grp (MGNS)

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Thursday 02 April, 2020

Morgan Sindall Grp

Annual Financial Report

RNS Number : 6230I
Morgan Sindall Group PLC
02 April 2020
 

 

 

Morgan Sindall Group plc ('the Company')

Legal Entity Identifier (LEI) number: 2138008339ULDGZRB345

Annual Financial Report

 

 

2 April 2020

 

 

Further to the release of the Company's Preliminary Results announcement on 20 February 2020, the Company announces that it has today published and issued to shareholders the 2019 Annual Report and Accounts ('Annual Report'), Notice of Annual General Meeting 2020 and the Form of Proxy. The following documents can be downloaded from the Company's website at www.morgansindall.com :

 

· 2019 Annual Report

· Notice of Annual General Meeting 2020

 

A copy of each document listed above has been submitted to the Financial Conduct Authority's national storage mechanism ('NSM') and will shortly be available via the NSM website at www.morningstar.co.uk/uk/NSM .

 

The Company will hold its Annual General Meeting at 10.00am on Thursday, 7 May 2020 at the Company's registered office, Kent House, 14-17 Market Place, London W1W 8AJ. 

 

As a result of the ongoing coronavirus (COVID-19) pandemic, and in line with latest Government advice, the Board is adopting a number of changes to the traditional running of the Company's AGM.  The Company's in-person representation at the AGM will be limited to satisfy the requirements of a quorum and only the formal business set out in the Notice will be considered at the AGM. In order to reduce the risk of infection we are asking shareholders to not attend the meeting, which will end immediately following the formal business.  Instead of attending this year's AGM, shareholders are urged to exercise their votes by submitting their proxy electronically or by post, as explained in the Notice of AGM.

 

The situation in relation to COVID-19 continues to evolve and the Company will update shareholders on arrangements for the AGM through its website at www.morgansindall.com . Shareholders are advised to check the Company's website for updates.

 

In accordance with the requirements of Rules 4.1 and 6.3.5 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 20 February 2020 contained all other information required by DTR 6.3.5.

 

 

 

ENQUIRIES: 

Morgan Sindall Group plc  Tel: 020 7307 9200

Clare Sheridan, Company Secretary

 



 

 

 

Appendix 1

The Group's risk profile continues to be supported by a strong balance sheet and secured workload, and a continued focus on contract selectivity. There have been no noticeable Brexit impacts, but we remain vigilant.

 

Our approach

Risk is inherent in our business and cannot be completely eliminated. Our risk governance model ensures that our principal risks and the controls implemented throughout the Group are under regular review at all levels. 

 

Group Board

The Board is responsible for setting the Group's risk appetite and for ongoing risk management, including assessing the principal risks that threaten our strategy and performance.

 

Audit committee

The audit committee assists the Board in monitoring risk management and internal control, and formally reviews the Group and divisional

risk registers on behalf of the Board.

Divisional boards


Risk committee

Each division identifies the risks facing its business and takes measures to mitigate the impacts. Senior managers take ownership of specific risks and ensure that tolerance levels are not exceeded.


The risk committee consists of heads of key Group functions, including legal, company secretarial, IT, finance, internal audit, tax, treasury and commercial. The committee identifies risks for the Group risk register and reviews the Group and divisional risk registers before they are presented to the Board and audit committee. The committee ensures that inherent and emerging risks across the Group are identified and managed appropriately.








Risk reviews


Strategic planning


Delegated authorities


Divisional reporting

Twice a year each division carries out a detailed risk review, recording significant matters in its risk register.

Each risk is evaluated, both before and after the effect of mitigation, as to its likelihood of occurrence and severity of impact on strategy. The Group head of audit and assurance follows the same process for identifying and reviewing

Group risks, conferring with

the risk committee.


Risk management is part of our business planning process. Each year objectives and strategies are set that align with the risk appetite defined by the Board.


Our finance director and Group head of audit and assurance have produced a schedule of delegated authorities that assigns approval of material decisions to appropriate levels of management. Such decisions include project selection, tender pricing and capital requirements. Board approval is required before undertaking large, complex projects. The approval system is regularly reviewed.


The divisional risk registers record the activities needed to manage each risk, with mitigating activities embedded in day-to-day operations for which every employee has some responsibility. Rigorous reporting procedures are in place to monitor significant risks throughout the divisions and ensure they are communicated to the Group head of audit and assurance.

Internal audit

The Group head of audit and assurance reviews and collates the divisional risk registers and draws from them when compiling the

Group risk register. An annual review across the Group is undertaken, focusing on significant projects and trends, and areas of concern.

 

 

Overview of the Group's risk profile

During 2019 the Board reviewed the Group's risk appetite and no significant changes were identified. The ongoing negotiations over the UK's exit from the EU continue to generate uncertainty and we are keeping a close watch on developments. However, the economy has continued to perform well in the reporting period and this is reflected in our trading position. We will adjust our strategy in response to any clear indicators, but are reassured that the majority of our regeneration schemes and a sizeable portion of our construction order book and pipeline of opportunities are supported by public sector or regulated clients, via frameworks and joint venture arrangements secured over the medium to longer term.

 

Our diversity of offering through construction and regeneration protects the business from cyclical changes in individual markets. Government commitments continue to support our business model and strategy, particularly in housebuilding and regeneration - areas expected to be a primary growth driver - and in infrastructure, where our work in the public and regulated sectors has longer-term visibility.

 

Based on current trading patterns, a strong balance sheet, our high-quality secured workload and visible pipeline of opportunities, our outlook for 2020 and beyond looks positive. All businesses remain focused on long-term partnerships, our favoured route to market

with more predictable outcomes. Our regeneration activities are mostly non-speculative, land option style arrangements, with efficient capital structures, all underpinned by a long-term visible pipeline.

 

Residential schemes at our price point have continued to be in demand during EU negotiations, meeting our expectations across

a broad UK portfolio. With government support for housing, we are confident that the homes we build will continue to be in demand and affordable. Should the market change, the majority of our schemes are subject to economic viability conditions: future phases can be remodelled or deferred, which together with robust risk and capital controls would help mitigate negative fluctuations. Construction's long-term focus on selectivity is reflected in its outturn margin, cash and future order book. Fit Out, while more susceptible to GDP fluctuations, has good visibility of its order book for the earlier part of 2020.

 

In terms of resourcing our medium- and long-term plans, we have banking facilities committed until 2022, a strong cash profile and robust capital controls in place. Voluntary employee turnover is at healthy levels in most businesses and where we are recruiting we are witnessing a positive interest in the new positions we have created to help us achieve our strategic objectives.

 

Principal risks

The principal risks to the business are set out on the following pages, as they relate to our Group strategic objectives.

 

The list is not exhaustive but includes those risks currently considered most significant or emerging in terms of potential impact, together with mitigating actions being taken.

 

The risks have been extensively reviewed but have not changed significantly in the reporting period. Any changes in severity and likelihood of impacts compared to 2018 have been indicated, and signify the Board's opinion of pre-mitigation risk movement.

 

Win in targeted markets 

Global and UK economic conditions could potentially impact our longer-term strategy in our markets.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Changes in the economy

There could be fewer or less profitable opportunities in our chosen markets.

 

Allocating resources and capital to declining markets or less attractive opportunities would reduce our profitability and cash generation.


No change

We will continue to monitor closely the potential impacts on the business of the UK leaving the EU, however we believe that in the medium to longer term the markets in which we operate remain favourable. We are reassured by the quality and volume of our pipeline of opportunities and secured workload in both regeneration and construction, and believe that this, together with our business model, should provide some insulation against any specific adverse consequences.

Longer-term risks are associated with EU labour (to sustain construction output) and potential consumer and investor confidence, but no short-term impacts have been seen to date or are anticipated.

The continued scrutiny of UK construction balance sheets remains a differentiator for us and continues to underpin our positive position in the sector, meaning that our stakeholders can engage with confidence, while allowing us to be highly selective.


The UK is expected to continue investing in areas that complement our strategy, including affordable housing, infrastructure, energy, education and transport. This supports our business model, which is designed to provide a mix of earnings across different market cycles.

Strategic focus on market spread, geographical capability and diversification to protect against the cyclical effect of individual markets.

High proportion of secured workload with public sector and regulated entities via long-term arrangements, with a healthy level of demand and typically preferential terms.

Elsewhere our strategy continues to be very selective and our procurement routes,

An enhanced understanding of medium-term pipeline quality, assisted by insights generated from analytical software, that enables us to predict trends more accurately and adjust our strategy in response. Regular reporting on sales, opportunities pipeline and secured workload, using customer relationship management software.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Exposure to UK housing market

The UK housing sector is strongly influenced by government stimulus and consumer confidence.

 

If mortgage availability and affordability are reduced this could make existing schemes difficult to sell and future developments unviable, reducing profitability and tying up capital.


No change

Sales volumes, pace and inflation across the regions have held up during the year in both the investor and private markets. There has been some decline in the London market but with signs of stabilisation.

There is high demand for housing on our regeneration schemes.

Despite external factors, there continue to be clear government support and demand for new affordable housing, which supports our business model and market positioning.


Working closely with public sector partners and government agencies such as Homes England to provide viable development and affordable homes.

Largely non-speculative, risk-share development vehicles, subject to viability conditions that reduce any negative impact from market fluctuations.

Targeting of forward-sold and funded sections

of large-scale residential schemes to

institutional investors.

A geographically spread residential portfolio that offers protection against regional variations and is geared to an affordable product.

A constrained land bank, preferring and targeting option-type agreements with owners, that limit and/or defer long-term exposure and boost return on capital employed.

Regular forecasting and monitoring of development pipeline of opportunities and secured workload including monitoring key UK statistics such as unemployment, lending and affordability.

Rigorous three-stage approval process

before committing to development schemes

and capital commitments.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Poor contract selection

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.

 

Failure to understand the project risks may

lead to poor delivery and ultimately result in reputational damage and loss of opportunities.


No change

The continued quality of our long-term secured workload should underpin future performance and provide sustainable performance and outcomes, also allowing us to remain highly selective when bidding future work.

Our order book maintains a high proportion

of public sector and framework clients with typically healthier risk profiles and is secured

in limited competition.


Clear selectivity, strategy and business plan to target optimal markets, sectors, clients and projects, which have proven to have delivered favourable outcomes. A deliberately large proportion of projects conducted via framework or joint venture arrangements with repeat clients who share our philosophy and values, making predictable outcomes more likely.

A proportion of construction work secured via sister company regeneration schemes, where expertise provided at an early stage can greatly influence the likelihood of project success.

Divisions selecting projects according to pre-agreed types of work, contract size and risk profile, with a multi-stage process of bid approval, including tender review boards, risk-profiling and sign-off by appropriate levels of management.

Staff planning and profiling to ensure appropriate levels of qualified resource for future work.

Initiatives to select supply chain partners who match our expectations in terms of quality, sustainability and availability.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Health and safety

Health and safety will always feature significantly

in the risk profile of a construction business. We carry out a significant portion of our work in public areas and complex environments, requiring strict observation of Health and Safety Executive standards.

 

Accidents could result in legal action, fines, costs and insurance claims as well as project delays and damage to reputation. Poor health and safety performance could also affect our ability to secure future work and achieve targets.

 

 


No change

Our health and safety performance, while  industry-leading, has plateaued in terms of incidents reportable to the Health and Safety Executive with our RIDDOR accidents increasing by two to 41 (2018: 39). However, our accident frequency rate stayed at 0.08 and our number of lost time incidents (resulting in absence from work) has fallen by 16%. We continue to explore ways to improve and reduce the total number of incidents incurred.


Board level health, safety and environment (HSE) committee focused on health and safety culture to drive better behaviour and performance.

Individuals in each division, and on the Board and Group management team, with specific responsibility for health and safety matters.

Quarterly meetings of the Group health and safety forum where representatives from all divisions continue to share best practice and exchange information on emerging risks.

Established safety systems, audits, site visits, incident investigation and root-cause analysis, monitoring and reporting procedures including near-miss and reporting of incidents that could potentially have resulted in serious injury.

Regular health and safety training that includes behavioural change, housekeeping on site and leadership engagement in driving site standards.

Communication of each division's health and safety policy to all employees and senior managers appointed to ensure they are implemented.

Innovations such as Fit Out's award-winning health and safety app to improve safety on sites.

Major incident management and business continuity plans, periodically reviewed and tested.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Environment

Our greatest environmental impact is energy use and waste generated by our activities. Climate change and governmental actions to reduce the impact could affect us in a number of ways: design solutions currently considered exceptional could become the norm (for example, protection for buildings against extreme heat or electric car charging points in all new houses); measures aimed at reducing climate change, such as a carbon tax or zero net deforestation requirements, could be introduced which could impact our business through higher costs and/or flexibility of operations; workforce and material productivity or availability may be affected by extremes of temperature or reduced availability of water, causing higher capital investment and operational expenditure, and disruption to revenues.

 

Increased frequency of extreme weather, such as floods and storms, could cause increased incidence of disruption to individual developments and projects and our supply network, which could lead to reduced profitability.

 

Environmental incidents that cause harm could result in legal action, fines, costs and insurance claims as well as project delays and damage to reputation. Poor environmental performance could also affect our ability to secure future work and achieve targets.

 


No change

While we have made significant reductions in our direct greenhouse gas (GHG) emissions over the last 10 years, our challenge is helping our supply chain to report and reduce their own emissions.


A climate action group with representatives from each division, chaired by our Group director of sustainability and procurement.

New science-based GHG measurements and targets, put in place in response to increased demand from our employees and external stakeholders to reduce emissions.

Where possible, the use of onsite energy generation and design for low carbon and climate change adaptation. Alternative fuels for our vehicle fleet and generators to reduce emissions.

Working with our supply chain to help them set up processes to measure and report on their own emissions.

Waste management plans in place within all divisions to reduce waste generated on site and waste transferred to landfill.

ISO14001-compliant environmental systems in place within all construction divisions.

Compliance with all applicable environmental requirements on our projects.

 



 

Develop and retain talented people

Talented, motivated people improve our performance, contribute to growth and are key to achieving our purpose. Employee surveys carried out by our divisions show that the majority of people are happy with their places of work, culture and leadership styles.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Failure to attract and retain
talented people

Talented people are needed to provide excellence in project delivery and customer service.

 

Skills shortages in the construction industry

remain an issue for the foreseeable future.


No change

Brexit complicates the skills issue as availability of EU workers may reduce. However, in the short term, our divisions have not witnessed any discernible issues.

Our current success is helping us attract and retain people, reflected in high levels of applicants and falling voluntary employee turnover rates.

In divisions whose voluntary employee turnover was higher, improvements continue to be made to the working environment and investment made in technology and leadership training.

We are responding to the challenge of an ageing workforce and undertaking work to improve our diversity, such as working with Women into Construction to encourage more women to enter the industry and a returnships programme to provide opportunities for people returning to work following a career break.


Giving people empowerment and responsibility together with clear leadership and support.

Attractive working environments, remuneration packages, technology tools and wellbeing initiatives to help improve employees' working lives.

Annual appraisals providing two-way feedback on performance.

Succession planning that includes identifying and developing future skills.

Training and development to build skills and experience, such as our leadership development and graduate, trainee and apprenticeship programmes which continue to be well received.

Employee engagement surveys that ensure we target areas to improve employee satisfaction.

Divisional 'people boards' that meet twice a year to review talent in the business.

Monthly HR reports to the Board including reporting on leavers and joiners.

Interviews with leavers and joiners to understand the reasons for their decision.

 

 

Disciplined use of capital

Our long-term success depends not only on our disciplined use of capital but also the liquidity of our clients, partners and suppliers,

which could be affected by overtrading in an increasingly uncertain market.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Insolvency of key client, subcontractor, joint venture (JV) partner or supplier.

An insolvency could disrupt project works, cause delay and incur the costs of finding a replacement, resulting in significant financial loss. There is a risk that credit checks undertaken in the past may no longer be valid.


Slight increase

The previously fragile main contractor market has stabilised in the period and should provide a healthier platform for our supply chain partners whose finances and performance might otherwise have been stretched.

Our cash position is not supported by any form of supply chain debtor finance and gives a clear indication of our health. With this, our strong balance sheet and shorter payment days, our supply chain partners regard us as dependable and reliable.


A business strategy focused on the public sector and commercial clients in sound market sectors.

A high proportion of our current secured workload is public sector-focused.

Rigorous due diligence on commercial clients and supply chain partners, obtaining where necessary relevant securities in the form of guarantees, bonds, escrows and/or more favourable payment terms.

A formal, multi-stage approval process before entering into contracts, supported by tender review boards.

Formal JV selection due diligence and approval

at Board executive director level, which includes seeking protection in the event of default by one of the partners.

Working with preferred or approved suppliers where possible, which aids visibility of both financial and workload commitments.

Monitoring supply chain utilisation to ensure

we do not overstress their finances or operational resource.

Rigorous monitoring of work in progress (uninvoiced income), debts and retentions.

 

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Inadequate funding

A lack of liquidity could impact our ability to continue to trade or restrict our ability to achieve market growth or invest in regeneration schemes.


No change

During the reporting period and for the foreseeable future, our average net daily cash continues to be healthy and clearly indicates the cash-backed nature of the business.

Our balance sheet continues to provide certainty for our employees, clients and supply chain in an increasingly uncertain market.

The strength of our balance sheet allows us to explore further investment in regeneration schemes and to continue to be selective in construction.


Banking facilities committed to 2022, which together with our strong cash position provide significant headroom.

A Group-led, disciplined allocation process for significant project-related capital, which considers future requirements and return on investment.

Daily monitoring of cash levels and regular forecasting of future cash balances and

facility headroom.

Regular stress-testing of long-term cash forecasts.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Mismanagement of working capital

Poor management of working capital and investments leads to insufficient liquidity

and funding problems.


No change

Our continuing focus on working capital management has enabled us to maintain a similar level to 2018 while improving our supply chain payment practices during the year. No material change is expected in 2020 as we target operating cash conversion of 100%.

We have maintained a positive momentum in cash management in construction due to a combination of improved returns, and cash optimisation and conversion.

Our average net daily cash for the period demonstrates our disciplined working capital management, but there are still areas for improvement that we are working on.


Our delegated authorities require that capital and investment commitments are notified and signed off at key stages via senior level approval.

Reinforcing a culture in the bidding and project teams of focusing on generating positive cash outcomes to ensure they meet expectations.

Monitoring and management of working capital with acute focus on any overdue work in progress, debtors or retentions.

Daily monitoring of cash levels and weekly cash forecast reports.

Efficient management of capital on regeneration schemes, such as phased scheme delivery, institutional and government funding solutions, and forward funding where possible.

 

 

 

 



 

Maximise efficiency of resources

Contract terms need to reflect risks arising from the nature and duration of the works. Projects must be properly resourced to ensure successful delivery for clients.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Mispricing a contract

If a contract is incorrectly costed this could lead to contract losses and an overall reduction in gross margin. It might also damage the relationship with the client and supply chain.


No change

Contract procurement routes and terms have remained favourable, as indicated by our outturn margins.

When bidding for future work we have remained focused on selecting projects that are right for the business and match our risk appetite, as reflected in the quality of our secured workload.

We continue to secure projects with repeat clients via negotiation, open book and framework style arrangements, with limited, selective open market bids, thus offering a higher probability of successful outcomes.


A well-established bidding process with experienced estimating teams.

A continued focus on key sectors means we are experienced in pricing projects and less likely to misprice than if entering new markets or bidding bespoke procurement products.

A robust review of our pipeline and bids at key stages, including rigorous due diligence and risk assessment, and obtaining senior level approval.

Project provision, where appropriate, for increase in cost and/or risk that hedges against inflationary and other project-related issues.

A culture and strategy in Construction of prioritising selectivity over volume when bidding.

Using the tender review process to challenge and mitigate rising supply chain costs.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Changes to contracts and
contract disputes

Changes to contracts and contract disputes

could lead to costs being incurred that are

not recovered, loss of profitability and delayed receipt of cash. Ultimately we may need to resort to legal action to resolve disputes, which can prove costly with uncertain outcomes as well

as damaging relationships.


No change

Construction's order book maintains a greater proportion of repeat work, which means we are more likely to achieve sustainable and predictable outcomes via sensible negotiated settlement.

The high proportion of framework-related, two-stage and negotiated work in our current order book continues to reduce the likelihood of unforeseen changes and disputes.

Our digital early warning tools and metrics flag potential project issues, enabling intervention earlier in the construction cycle.


Reviewing contract terms at tender stage and ensuring any variations are approved by the appropriate level of management.

Well-established systems of measuring and reporting project progress and estimated outturns that include contract variations and impact on programme, cost and quality.

Continued use and development of electronic dashboards for project management and change control, and commercial metrics designed to highlight areas of focus and provide early warnings.

Where legal action is necessary, notifying the Board, taking appropriate advice and making suitable provision for costs.



 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Poor project delivery

Failure to 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.


No change

Our continued focus on project selectivity combined with the quality of our order book reduces the probability of poor performance.

There is recognised stretch in the labour market which has been manageable in the short term but could be exacerbated by Brexit if the government does not continue to allow EU skills mobility.

Digital business intelligence enhancements in Construction continue to develop in our pursuit of project- and pipeline-related early warning indicators that allow us to intervene.

Following the Hackitt report on building regulations and fire safety and in advance of expected regulatory changes, Construction and Urban Regeneration have reviewed and updated their methodology and approach to ensure that project specifications are compliant.


Incentivising project teams on Perfect Delivery1 outcomes to achieve high levels of client satisfaction.

Various initiatives delivered in Construction and Urban Regeneration that focus on improvements in product quality, predictability and client experience.

Strategic supply chain trading arrangements that help to ensure we achieve predictable outcomes in quality and behaviours.

Formal internal peer reviews that highlight areas of improvement and share best practice and 'lessons learned' exercises.

Regular formal and informal stakeholder feedback, allowing us to intervene when required and refine our offering to provide exceptional outcomes.

1 Perfect Delivery status is granted to projects that meet all four customer service criteria specified by each division.

 

 

Pursue innovation

Innovation drives quality, efficiency and competitive advantage and continued investment in technology will improve our delivery and service. Business continuity depends on secure and resilient IT systems and the persistent threat of cyber-risks continues to present

a challenge.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Failure to innovate

A failure to produce or embrace new products

and techniques could diminish our delivery to clients and reduce our competitive advantage. It could also make us less attractive to existing

or prospective employees.


No change

All divisions have continued to develop solutions to improve efficiency, client service and employee satisfaction. Examples include BakerHicks' 'Risk Cube' (see page 10) which improves safety for clients when maintaining their buildings, and Urban Regeneration's 'Muse:well' campaign which includes activities for employees under the themes of wellbeing, charity, training and development, and environmental initiatives.

Infrastructure in particular continues to work with leading UK companies who encourage innovation and optimised construction techniques and share in the risk and reward. This allows us to compete in areas with high barriers to entry while sharing new ideas across the Group; examples include Highways England, Thames Tideway and Sellafield.

Our regeneration divisions utilise market-leading development structures which help unlock underperforming assets and differentiates our offering. This includes working with leading investment partners to create innovative funding solutions to improve the viability of schemes and facilitate early engagement.


One of our core values is to challenge the status quo and innovation is therefore strongly encouraged. New ideas are welcomed from every employee, partner and supplier, with an emphasis on efficiency over bureaucracy.

Our initiatives around quality of delivery and exceptional client experiences are not just founded on process, but are integral to our culture.

Our employees enjoy working on high-profile, innovative projects that provide them with the opportunity to enhance their knowledge and experience.

Business and IT come together via forums that sponsor and promote new innovations across the business.

 

Risk and potential impact


Risk change in reporting period


Mitigating activities

Failure to invest in information
technology (IT)

Investment in IT is necessary to meet the future needs of the business in terms of expected

growth, security and innovation, and enables

its long-term success.


No change

All our businesses are investing in significant new technology to enhance our stakeholder experience and improve efficiency. We see this trend continuing.

In order to protect against increasing levels of cyber-attack, we have continued to invest in established information security controls and engaged an external security partner who advises on strategy.

We have rolled out endpoint encryption, active monitoring and threat analysis of external web-based threats, as well as data protection and information security training.

We migrated our active directory to Microsoft Azure as part of an estate update that is now being rolled out, including Office 365 and Windows 10. This will ensure we have the latest business software and that our data is secure and protected.


A dedicated team focused on providing a stable and resilient IT environment, and continued investment in core infrastructure and applications.

A centralised IT service that improves efficiency, oversight, reporting, security and performance, while divisional resource provides business-specific product support.

Group-wide financial software that provides a fully integrated construction platform to manage the project life cycle.

A dedicated information security team certified and accredited by key industry bodies, who create awareness and address threat alerts, risk and vulnerability prioritisation and response.

Government-accredited security installations and certification to store protectively marked information.

Certification to the government's Cyber Essentials Plus Scheme and ISO 27001.

 

 


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