Morgan Sindall Group Regulatory News (MGNS)

18 Dec 2008 07:00



18 Dec 2008

Morgan Sindall plc

Morgan Sindall plc, the construction and regeneration group, provides the following period end trading update in advance of the announcement of its preliminary results for the year ended 31 December 2008, expected to be in late February 2009. 

Trading

Morgan Sindall remains on track to achieve its expectations for a record profit in the current year and continues to be well positioned as a result of its broad spread of activity across the construction and regeneration sectors. Our strategy remains one of developing market leadership in all the sectors in which we operate. 

Fit Out has continued to perform strongly in the second half of the year. As previously stated we continue to expect a fall in demand as we enter 2009, although our broad sector spread and focus on quality leadership should offset this to some extent. 

Construction is trading in line with our expectations and is well placed to face the challenges in the general construction market, with over 70% of its workload coming from the public sector. Our strength in the education and healthcare sectors in particular should help us to benefit from Government plans to bring forward public spending in these areas.

Infrastructure Services continues to benefit from the buoyant infrastructure market. It has continued to strengthen its market position by further developing its market leading positions in tunnelling, transport, water and utilities. The division's expertise in tunnelling means it is well placed as a number of major tunnelling projects are procured over the next twelve months.

Affordable Housing is continuing to secure and deliver refurbishment and new build social housing projects, which is helping to largely offset the impact of the downturn in open market housing. The affordable housing sector remains a key Government priority and the recent announcement to accelerate spending in this area is encouraging.

Urban Regeneration was successful in securing the £350m Swindon town centre regeneration scheme in November and it continues to progress three further large regeneration projects currently at preferred bidder stage. In the short term the market will remain subdued and the division is therefore focusing on renegotiating current agreements to ensure it is well positioned when the market recovers.

Outlook

The Group is financially robust and remains on track to achieve a record result in 2008 with each of our divisions performing in line with our expectations. The forward order book remains strong at £3.8bn and in addition to this Urban Regeneration's development pipeline has increased to £1.3bn. In the current economic climate each division is putting an increased emphasis on cash management, cost reduction and supply chain improvements, as well as responding to market growth opportunities where they present themselves. We therefore remain well placed to meet the challenges and opportunities we face in 2009 and to deliver long term sustained growth.

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