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Morgan Sindall increases margin to 2.9%

21 February 2019 | By Neil Gerrard

Morgan Sindall increased its pre-tax profit by 23% in 2018, its latest annual results have revealed.

The company recorded a 6% increase in revenue to nearly £3bn for the period to 31 December 2018, while adjusted profit before tax (before £1m of intangible amortisation) hit £81.6m, up 23% on the year before.

The company said its improved results were as a result of a focus on its construction and regeneration businesses.

Overall, the group delivered an adjusted operating margin of 2.9%, up from 2.5% the year before.

Its construction and infrastructure division improved its operating margin to 2% on an operating profit of £27m, up 32%.

Meanwhile, its urban regeneration business delivered an operating profit of £19.6m, an increase of 96% on the year before.

The fit-out division saw revenue growth of 13% and an operating profit of £43.8m at a margin of 5.3% but the partnership housing arm saw its operating profit dip to £12.2m, down from £14.1m the year before, as a result of “operational issues” in its contracting activities.

The group’s secured order book as at the end of 2018 was £3.6bn, down 7% on the previous year although Morgan Sindall said the quality of the work across the order book continued to improve.

Chief executive John Morgan said: "2018 has been another year of strong growth for the group and these excellent results reflect the high quality of our operations and our people. There is significant positive momentum across all divisions and this provides the platform for future strategic and operational progress.

"Our strong balance sheet, with net cash throughout the year and a business which continues to generate positive operating cash flow is a significant differentiator for us. This provides us with the flexibility to continue being highly selective with bidding in our construction activities while also allowing us to invest in our regeneration activities.

"Looking ahead to 2019, we are confident of another good year of progress and the group is in a strong position to deliver on its expectations."

Headline results by business segment (Bps = basis points)

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