Morgan Sindall posts 23% profit hike

The multi-disciplinary contractor has reported group revenue up by 6% to almost £3bn, with pre-tax profit reaching £81.6m in its full year results.

Morgan Sindall, which has offices in Manchester, Liverpool and Whitehaven, reported year end net cash of £207m, with a committed order book of £3.6bn – down by 7% year-on-year – and a regeneration and development pipeline of £3.1bn.

Divisionally, the standout increase came from the group’s urban regeneration operation Muse, which saw profits rise 96% to £19.6m. Key to the division’s performance was the English Cities Fund joint venture with Homes England and L&G, which in Salford alone saw more than £50m of mixed-use development completed and pre-let and forward-funding deals agreed on New Bailey offices..

The construction and infrastructure business reported an operating profit of £27m, reflecting a rise of 32%, while fit-out, which covers Overbury and the Morgan Lovell brand, saw profits climb 12% to £43.8m.

In the Lovell partnership housing division, profit dipped from £14.1m to £12.2m, with the group reporting that the division had been impacted by operational issues in its contracting work. In the North West, Lovell is on site on schemes in Altcar Lane in Leyland, East Avenue in Openshaw, Yew Tree in Liverpool and Oaktree Grange in Chorley.

John Morgan, chief executive of the group, said: “2018 has been another year of strong growth for the group and these excellent results reflect the high quality of our operations and our people. There is significant positive momentum across all divisions and this provides the platform for future strategic and operational progress.

“Our strong balance sheet, with net cash throughout the year and a business which continues to generate positive operating cash flow is a significant differentiator for us. This provides us with the flexibility to continue being highly selective with bidding in our construction activities while also allowing us to invest in our regeneration activities.

“Looking ahead to 2019, we are confident of another good year of progress and the group is in a strong position to deliver.” The group will pay a dividend of 53p per share.

Within the region, Morgan Sindall’s construction business has been particularly active in Liverpool, with its latest contract wins being the Rutherford Diagnostics Centre within the Knowledge Quarter, where it is also appointed on The Spine building; and the Liverpool John Moores University Copperas Hill project.

The group has also been named preferred bidder on the University of Salford’s £45m engineering centre, the first part of an £600m masterplan.

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