Tough half-year for Morgan Sindall
Construction group Morgan Sindall is blaming tough market conditions and lower margins for a 24% fall in its half year earnings.
Announcing its results for the half year ended June30, the company, which operates across the North West, warned it does not anticipate significant improvement in the second half. The Morgan Sindall Group, which is parent company to construction, infrastructure and design company Morgan Sindall, as well as Muse Developments and affordable housing specialist Lovell, reported profit before tax of £15.4m, 24% down on the $20.3m figure for the first half of 2012 . However, revenue of £1,02bn was up 2% on the previous year (HY 2012: £1bn) and the firm’s order book is up 1% from FY 2012. The company reported an exceptional charge of £13m taken as a provision against amounts recoverable on a small number of older construction contracts. Chief Executive John Morgan said: “The first half has seen difficult market conditions across all of our markets, with competitive pressures impacting on margins and profitability. “The improved positive cash position, however, demonstrates the underlying strength of the business and the benefit of a sustained focus on cash management, which will remain. “Looking ahead to the second half, overall market conditions are not expected to significantly improve. The business will continue to focus on cash management and will look to improve the order book selectively, such that it is well-positioned to take advantage of the growth and investment opportunities in its markets as they arise.” Morgan Sindall has won a £19m contract with Maro Developments to construct retailer Matalan’s new head office at Knowsley Industrial Park. It has also has secured a £7m contract to expand Liverpool science park and construct a new building which will provide 42,000 sq ft of additional office and laboratory space. The new building will be named Innovation Centre 3. Other key project wins in the North West include a £7.9m contract to design and build a 1,000 space, seven-storey car park in Stockport. The new car park, for sister company Muse Developments and Stockport Council, forms part of the first phase of developments of a multi-million pound transformation of the Grand Central leisure complex into a high specification office quarter. It has also been awarded a £4.1m contract to refurbish Manchester Metropolitan University’s Righton Building.
This was posted in Bdaily's Members' News section by Simon Malia .