Last checked at 7 Nov 2013 07:00
7 November 2013
Morgan Sindall Group plc
Q3 Interim Management Statement
Morgan Sindall Group plc ('the Group') today announces its Interim Management Statement for the period from 1 July 2013 to date.
Group Performance
The overall Group performance in the third quarter ('Q3') was in line with the Board's expectations as at the time of the half year results on 5 August 2013 and followed a broadly similar trend to the first half. Within this, Group revenue held up well when compared to Q3 2012, whilst Group margin was impacted primarily by margin contraction in the Construction & Infrastructure division.
The Group's forward order book as at the end of Q3 was £3.3bn, up 6% from the half year position.
Operating Performance
In Construction & Infrastructure, there has been no significant change in market conditions or performance in Q3. The focus for the division remains on operational delivery, contract selectivity through the risk management of contractual terms & conditions and working capital management. As markets recover, upward pressure on material costs and subcontractor costs will provide additional management challenges.
Fit Out has seen no significant change to performance or order book in Q3 compared to the first half, however there are early indications of increasing confidence of market improvement through 2014 and beyond.
As expected, performance in Affordable Housing has improved in Q3 over the first half. This has been driven primarily by continued positive trends in its open market housing activities, with an increase in open market house sale completions of 41% in the nine months of 2013, compared to the same period in 2012. However, there remains significant competitive pressure on construction revenue and margins, exacerbated by increasing material costs and subcontractor costs.
The level of activity on Urban Regeneration projects continues to provide confidence that the division is well-placed to benefit from 2014 onwards. Since the half year, the division was appointed by South Tyneside Council as the sole developer of the £100m South Shields 365 town centre renewal.
Investments continued with its strategy of recycling its invested capital, with the sale of its interest in Tayside Health Holdings Limited during the period, at a value in line with expected returns from this division.
Financial Position
Net debt as at 31 October 2013 was £15m. The average daily net debt from the start of the year up to 31 October was £23m, a continued improvement from the half year average of £32m. Q3 average daily net debt was £13m.
Outlook
Based upon current progress across all its activities, the Group is on course to deliver a result for the year in line with the Board's expectations. Looking further ahead, the Board remains confident that the business is well-positioned to benefit from profitable opportunities as its markets recover.
ENDS
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK construction and regeneration group with revenue of c£2 billion, employing around 6,500 employees and operating in the public and commercial sectors. It operates through five divisions of construction and infrastructure, fit out, affordable housing, urban regeneration and investments.
ENQUIRIES:
Morgan Sindall Group Tel: 020 7307 9200
John Morgan, Chief Executive
Steve Crummett, Finance Director
Brunswick Tel: 020 7404 5959
Jonathan Glass
Nina Coad