Morgan Sindall remains in ‘strong position’

Construction giant Morgan Sindall said it remains on track to meet its expectations for the current financial year.

In an interim management statement, covering the period from 1 July to 8 November 2010, the company said: "Although market conditions remain challenging, our financial strength, breadth of capabilities and leading positions across a range of market sectors leave us well placed to capture further market share.

"The Group is continuing to realise further cost savings as it adapts its business to the current market environment. It remains in a strong position with a £3.7bn order book, average cash year to date at £64m, ahead of the average cash of £60m achieved in the first half of the year, and £100m of committed banking facilities. There has been no significant change in the Group's financial position since the publication of the interim report for the six months to 30 June 2010."

Morgan Sindall said its construction and infrastructure division was successful in the second half of the year in securing key opportunities, which included the £19m regeneration project at Stockbridge Village currently underway for Knowsley Council.

In September, Morgan Sindall's affordable housing division Lovell Partnerships secured a number of maintenance contracts and assets from the social housing division of Connaught for £28m.

Morgan Sindall said the transaction has led to new agreements with 45 local authority and housing association clients and has created a significant number of new opportunities for the division.

The statement added: "Overall, we currently expect the Connaught transaction to add around £100m of revenue in 2011, although we do not expect the full profit benefit until 2012 as we realise efficiencies in the contracts acquired.

"The division's outlook remains reasonable given the new build social housing target recently announced by the Government in the comprehensive spending review. The division's forward order book is up on the start of the period as it now includes Connaught related contracts totalling £142m, which extend forward over two years."

Staffordshire-based Lovell has regional offices in Altrincham and Birkenhead.