Last checked at 25 Mar 2020 07:00
25 March 2020
Morgan Sindall Group plc
COVID-19 Update
Morgan Sindall Group plc ('the Group'), the construction and regeneration group, provides the following update in respect of Covid-19.
During the first 10 weeks of the financial year, the Group continued to perform well and in line with its expectations, with continued strategic and operational progress made across all its activities.
The health and wellbeing of its people, partners and the public is the Group's overriding priority and across the business, a wide range of continuity and mitigation planning has been put in place to ensure, as far as possible, the safe operational continuity of the business in line with Government guidance.
The Group is now experiencing disruption to its operations in a number of areas. 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.
As a consequence, it is anticipated that the extent of the overall disruption will inevitably have a material impact on Group profitability for the year. Given the evolving and dynamic nature of the situation, it is too early to quantify the impact and so the Group is withdrawing its previous market guidance until greater clarity returns.
The Group continues to benefit from a strong financial position. At 31 December 2019, the Group had year-end net cash of £193m (of which £57m was held in jointly controlled operations or held for future payment to designated suppliers).
For the current year, average daily net cash from 1 January to 20 March was £132m. Net cash as at 20 March was £102m (including £60m held in jointly controlled operations or held for future payment to designated suppliers).
In addition, the Group has committed bank facilities of £180m and as a precautionary measure, the Group has drawn on these facilities in full to provide control over its own cash resources. It should also be noted that the Group has no defined benefit pension scheme contribution commitments.
In the light of the current economic uncertainty, the Board believes it is prudent to cancel the final dividend of 38p per share as announced on 20 February 2020. The Board may consider paying a second interim dividend in lieu of the cancelled final dividend once there is greater visibility on the impact of COVID-19 on the Group's businesses and the economy as a whole.
The Group remains committed to its strategy of driving long-term success through organic growth for the benefit of all its stakeholders and is confident in its prospects, supported by a total orderbook of c£7.6bn across its diversified and geographically spread portfolio of construction and regeneration activities.
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."
This announcement contains inside information. The person responsible for the release of this announcement on behalf of Morgan Sindall Group plc is Steve Crummett, Group Finance Director.
ENDS
ENQUIRIES:
Morgan Sindall Group plc Tel: 020 7307 9200
John Morgan, Chief Executive
Steve Crummett, Finance Director
Instinctif Partners Tel: 020 7457 2020
Matthew Smallwood
James Gray
Rosie Driscoll
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK construction and regeneration group with revenue of c£3bn, employing around 6,700 employees and operating in the public, regulated and private sectors. It operates through six divisions of Construction & Infrastructure, Fit Out, Property Services, Partnership Housing, Urban Regeneration and Investments.