13 Nov 2008 07:00
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Morgan Sindall plc
13 November 2008
INTERIM MANAGEMENT STATEMENT
Morgan Sindall plc, the construction and regeneration group, announces today its Interim Management Statement covering the period 1 July 2008 to 12 November 2008.
Morgan Sindall remains on track to achieve its expectations for the current year and continues to be well positionedΒ as a result of itsΒ broad spread of activity across the construction sector. Our strategy remains one of developing market leadership in all the sectors in which we operate.Β
Fit Out is deliveringΒ a strong second half performance. Its broad sector spread andΒ marketΒ leadershipΒ inΒ theΒ quality ofΒ itsΒ project deliveryΒ areΒ helping toΒ offsetΒ the impact of the downturn in the financial services sector. The order book isΒ comparable with the level atΒ the start of the year although, as previously stated,Β we continue toΒ expectΒ aΒ fall in demand in 2009.
Construction is performing in line with expectations and is well positioned to meet the challenges facing the sector. With around 50% of its activity in the education sector, where the division has secured major contracts with North Lanarkshire Council (worth up to Β£100m) andΒ BidefordΒ CollegeΒ (Β£44m) during the period,Β and a further 20% inΒ otherΒ public sectorΒ work,Β the division is well placed to benefit from any acceleration of the Government's spending plans. In addition, withΒ aroundΒ 70% of its workloadΒ arisingΒ from framework arrangements, the division hasΒ goodΒ visibility on itsΒ expectedΒ revenuesΒ for 2009.
Infrastructure Services continues to trade positively, benefitting fromΒ aΒ buoyantΒ infrastructure market. Its major projects are performingΒ wellΒ andΒ itΒ continues to haveΒ a healthy order book. The division isΒ currentlyΒ targetingΒ furtherΒ major infrastructure opportunitiesΒ such as Crossrail, the AMP5 work streams in the water sector,Β andΒ tunnellingΒ projectsΒ in theΒ utilitiesΒ sector,Β in particular taking advantage of the division's market leading position in tunnelling. The Government recently highlightedΒ that infrastructure investmentΒ isΒ a spending priority, which is positive for the sector.
Affordable Housing's refurbishment and new buildΒ socialΒ housingΒ contractingΒ businessΒ hasΒ continued to perform robustly. The division has secured significant new contracts, includingΒ a new build social housing project forΒ Hounslow Homes (Β£53m) andΒ hasΒ grownΒ this businessΒ toΒ largelyΒ offset the impact of the downturn in the open market housing sector. The Government's reiteration of its commitment to the affordable housing sector is encouragingΒ and weΒ continue toΒ believe that mixed tenure regeneration will drive growth in the longer term.
The regeneration market continues to be subdued, althoughΒ ourΒ Urban RegenerationΒ divisionΒ is pursuing a number of public sector opportunities in the short term. As previously stated the divisionΒ hasΒ limited exposure to the revaluation issues impacting the sector. It hasΒ a long term pipeline of projects andΒ is renegotiatingΒ a number of development agreements,Β ensuring the division is ideally positioned to exploit opportunities when the regeneration market recovers.Β
TheΒ Group'sΒ forwardΒ order book has softenedΒ slightlyΒ toΒ Β£4.0bnΒ from Β£4.2bn at 30 June 2008.Β Β In the current economic climateΒ each of our divisions is putting an increased emphasis on cash management, cost reduction and supply chain improvements,Β as well as responding to market growth opportunities where they present themselves.
The Group remains financially robust withΒ averageΒ cash balancesΒ for the year to date above the level achieved for the corresponding period in 2007Β andΒ withΒ Β£75m of committed banking facilities in place, there having been no significant change in the Group's financial position since the publication of the Interim Report for the six months to 30 June 2008.
In summary, Morgan Sindall is on track to achieve a record yearΒ in 2008Β and is well placedΒ to meet the challenges and opportunities we face in 2009 andΒ toΒ deliver long term sustained growth.
There will be a short presentation,Β at 4pm today, by managementΒ to analysts at the Group's offices at KentΒ House,Β 14-17 Market Place,Β LondonΒ W1W 8AJ.
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ENQUIRIES: |
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Morgan Sindall plc |
Tel: 020 7307 9200 |
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Paul Smith,Β Chief Executive |
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DavidΒ Mulligan,Β Finance Director |
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Blythe Weigh Communications |
Tel: 020 7138 3204 |
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Tim Blythe |
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Paul Weigh |
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