Fit-out still the star performer at Morgan Sindall

The Group said its fit-out, construction and infrastructure businesses had offset a weaker performance by its property services division whose contract performance had been difficult and loss in the financial period is likely to be higher than expected. 

The Group added it remains on track to deliver a full year performance in line with board expectations, despite a “challenging” market. 

“General market conditions remain challenging yet manageable,” said John Morgan, chief executive. “Against this backdrop, our high‐quality secured order book and our operational delivery capabilities give us great confidence for the rest of the year and we’re on track to deliver a full year performance which is in line with our expectations.” 

Divisional performance 

The Group’s fit-out division has continued to trade strongly in the financial period so far and with good visibility of orders to the end of the year it is poised to return operating profit slightly above its medium‐term target of between £50 million and £70 million.  

Group revenue was up 14 per cent in the six months to June (£1.9 billion; HY2022: £1.6 billion), with profit also up on the previous year, and this too was mainly due to fit-out performance whose operating profit at the time was up 43 per cent to £30.4 million. 

It added its construction and infrastructure divisions had performed better than expected due to long‐term client relationships, operational delivery and risk management. 

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Long‐term partnerships with the public sector provided resilience to a softer housing market for the Group’s partnership housing division. Average capital employed for the year is expected to be £250 million. 

In urban regeneration, procurement and planning processes are increasingly drawn out. Average capital employed is expected to be £100 million, with expected return around the mid‐teens. 

Financial highlights 

The Group reported a total secured order book value of £9.1 billion at 30 September 2023, up 7 per cent on the year-end position. 

Average daily net cash for the period 1 January to 27 October was £275 million; for the full year it is expected to be around £270 million. 

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