Morgan Sindall warns on profit amid site disruption
Several of Morgan Sindall’s clients have already instructed it to close construction sites, as it reported seeing “disruption” to its operations.
In an update on the first 10 weeks of its financial year, the contractor said: “Certain construction sites have already closed under instruction from the relevant clients and this is expected to increase across a number of divisions and activities. In addition, activity on other sites and projects is slowing and progress with some development schemes in the regeneration activities is becoming more uncertain.”
It added that this was likely to hit the group’s profitability for the year, although it was too early to quantify the impact. It has also cancelled a final dividend to shareholders that was announced on 20 February 2020.
The firm said it was in a strong financial position, with year-end net cash of £193m and that it continued to perform in line with expectations. It has also put in place a range of continuity and mitigation planning in line with government guidance. Its order book stands at £7.6bn.
John Morgan, chief executive, said: “These are clearly challenging times and we continue to take the appropriate action to mitigate the impact of Covid-19. The Group remains well funded, with good cash liquidity and an orderbook of c£7.6bn, underpinning our confidence in the Group’s long-term prospects.”