The construction group increased its cash reserves by £140m during the 12 months ended 31 December 2020, helping it to weather a 30% pre-tax profit drop, according to a stock exchange filing.
Morgan Sindall Group reported a pre-tax profit of £61m for the full-year 2020, down from £89m in 2019 but in line with the company’s November projections.
The group attributed the drop in profits to “additional costs incurred from site closures and implementing new safety processes, lower productivity on sites, and construction delays”.
Despite this, Morgan Sindall bolstered its balance sheet, reporting net cash of £333m at the end of 2020 compared to £193m the previous year, an increase of 72%.
In addition, the group’s revenue remained stable despite the challenges posed by the pandemic; the £3bn reported for 2020 was down only 1% compared to the previous twelve-month period.
“While the year has been dominated by the Covid-19 pandemic, these results reflect the resilience across the group and the benefits of actions taken in recent years to maintain contract selectivity, further improve payments to our supply chain and maintain a strong cash position at all times,” said chief executive John Morgan.
“The size and quality of our growing secured workload leaves us well-positioned for the future and we are on track to deliver a result which is materially ahead of our previous expectations and slightly ahead of that delivered in 2019.”
Looking ahead, the group has a secured pipeline of work valued in excess of £8bn across all of its divisions, according to the results.
Morgan Sindall is organised into six operating divisions: Morgan Sindall Construction, its construction and infrastructure arm, fit-out division Overbury, Morgan Sindall Property Services, housing arm Lovell Partnerships, urban regeneration specialist Muse Developments, and Morgan Sindall Investments.
Muse, the group’s regeneration arm, is delivering several projects across the North West, including the mixed-use New Bailey scheme in Salford as part of the English Cities Fund joint venture with fund manager Legal & General.
The company reported a 53% drop in operating profit for the period, from £19.4m to £9.2m, but revenue was up slightly on the previous year.
Matt Crompton, managing director at Muse, said: “2020 was an unprecedented year. Our teams across the business have shown real stoicism, agility and tenacity, working diligently to minimise the virus’ impact on the business and continue to progress our schemes across the UK.
“One of our key objectives for 2021 is to continue to work closely with local authorities to repurpose their towns and cities, but by leading the charge on sustainable, adaptable and complementary developments that will improve places, lives and communities for the future.”