Morgan Sindall shares down 13% after profit warning

Underlying development and construction demand are up this year, the diverse group said in an autumn trading statement, despite problems with contracts in the South causing it to issue a profits warning.

The Lovell, Muse Developments, Overbury parent said it has performed well since 1 July and the overall committed order book at 30 September 2014 was £2.7bn, down 2% from the half year position but up 12% from the start of the year.

The scale of the contract writedowns and profit reduction were not disclosed in the statement to the stockmarket. Nevertheless, shares in Morgan Sindall were down 104p to 684p by mid-morning.

The potential regeneration and development pipeline as at 30 September 2014 was £3.2bn, level with the half year position and up 5% from the start of the year.

However, the group has been "adversely impacted by a small number of construction contracts in London and the South which have experienced timetable slippages and increased estimated costs to complete." The statement continued: "As a result, the board now expects the full year result will be below previous expectations set at the time of the half year results announced on 5 August 2014."

During the Period, the investments division headed up the consortium appointed as Preferred Bidder for the North West batch of the Priority Schools Building Programme under the Government's PF2 initiative, for projects with a capital value of between £80-120m.

Net debt as at 22 October was £32.0m. Average daily net debt from the start of the year to 22 October was £7.7m.

Your Comments

No surprise, really. Been a real bad place last few years.

By John Cocker (Leeds)

In what way?

By mancboi

The north west division is a shell of its former self. Hardly any one left there after four or five rounds of aggressive redundancies. One or two people of merit left – tops. Rudderless outfit. See the banner on the right hand side of the page>>>>>>> don’t be stupid, people.

By JC (L)

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