Last checked at 1 Jul 2009 07:00
Morgan Sindall plc
1 July 2009
Pre-close trading update
The Board of Morgan Sindall today announces its trading update for the six months to 30 June 2009. The Group's interim results will be announced on Monday 10 August 2009.
The Group remains on track to meet our expectations for the current year and is trading positively, despite continuing to face challenging conditions in some of the construction and regeneration markets in which we operate.
As expected, Fit Out is experiencing tougher market conditions, with revenue falling by around a quarter in comparison to the same period last year. We expect these conditions to continue in the second half of this year although the current forward order book, which extends into 2010, remains broadly in line with the start of the year.
Construction's performance continues to improve and the division has traded in line with our expectations over the first half of the year. Public sector spending remains robust although competition in the market has intensified. The forward order book is down slightly compared with the start of the year albeit this is balanced by an improvement in our pipeline of projects at preferred bidder stage.
Infrastructure Services' performance is in line with that in the same period last year (prior to taking account of one-off costs incurred in 2008) although the level of bidding activity for utilities and civil engineering contracts, particularly tunnelling opportunities, has increased significantly. In particular the division was successful in the first half of the year in securing its first AMP5 utilities contract with Severn Trent valued at £500m over ten years. Consequently the division's order book has improved since the start of the year and is expected to strengthen further during the second half.
Affordable Housing's revenue from refurbishment and new build social housing contracts remains robust. The open market for housing remains subdued although reservation rates over the past few months have exceeded those achieved during the same period last year. The division's forward order book has fallen slightly since the start of the year.
Urban Regeneration's market remains quiet, as expected. Nevertheless, the division has been successful in the first half of the year in securing two large regeneration schemes at Doncaster, valued at £300m over 6 years, and at Blackpool, valued at £220m over 10 years. The Group's forward order book currently stands at £3.6bn, broadly consistent with the start of the year. The Group's financial position remains strong, with net cash and £75m of banking facilities that have been recently renewed through to mid 2012. Our strategy remains one of building market leadership in each of our chosen market sectors and we expect the current market to present opportunities for us to make further progress towards fulfilling this goal.
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ENQUIRIES:
Morgan Sindall plc Tel: 020 7307 9200
Paul Smith, Chief Executive
David Mulligan, Finance Director
Blythe Weigh Communications Tel: 020 7138 3204
Tim Blythe Mobile: 07816 924626
Paul Weigh Mobile: 07989 129658