Last checked at 22 Apr 2021 07:00
22 April 2021
Morgan Sindall Group plc
This announcement contains information that qualified, or may have qualified, as inside information for the purposes of Article 17 of the Market Abuse Regulations (EU) 596/2014 (MAR). The person responsible for making this announcement is Steve Crummett, Finance Director
Trading Update
Morgan Sindall Group plc ('the Group'), the construction and regeneration group, today announces an update on trading and the outlook for the 2021 financial year.
Group performance and 2021 outlook
At the time of the 2020 full year results in February 2021, the Board reported that it was well set for strong growth in 2021. Since then, all divisions have made further positive operational and strategic progress in their markets and momentum across the Group has continued to increase.
On the basis of the performance to date, the Group's operational delivery capabilities and the current visibility of future workload for delivery in the remainder of the year, the Group is now on track to deliver a full year performance which is significantly ahead of its previous expectations.
In addition, the Group's strong cash position has also further improved and it is now expected that the average daily net cash for the full year will be in excess of £180m.
Trading by division
In Construction & Infrastructure, Infrastructure is continuing to trade strongly, with operational delivery and work mix driving further margin growth. Construction has had a strong start to the year with its secured order book at the end of March up 10% from the year end position and its ongoing focus on contract selectivity and risk management provides the basis for continued further improvement through the year.
Fit Out has had a very strong trading period and its secured order book at the end of March was 18% higher than at the year end. In addition, it has in excess of £400m of work currently at preferred bidder stage. Taken together, Fit Out is expected to deliver a result for the year which is materially ahead of its medium-term target1.
Volume in Property Services has held up well despite lower than expected planned maintenance activity, with its margin expected to improve as the year progresses.
Partnership Housing has continued to see high levels of market demand, which together with ongoing improvements in operational delivery, is driving good margin and profit growth.
Progress with Urban Regeneration's developments and schemes has been as expected.
1 Fit Out's medium-term target is annual operating profit at or around c£35m
Group secured workload
The total secured workload for the Group as at 31 March 2021 was £8.1bn, up 8% from the corresponding prior year position (down 2% from the 2020 full year position).
This comprised the construction secured order book of £4.0bn, up 15% from the prior year (up 2% from the full year) and the regeneration secured order book of £4.1bn, which was up 1% from the prior year (down 5% from the full year).
In addition, the Group has been selected by West Sussex County Council as its partner for a property joint venture. The 30-year joint venture will see Partnership Housing manage the development of surplus Council land into new homes and commercial premises across the County on behalf of the JV, with an initial immediate pipeline of 10 sites already identified. No value is yet attributed to this JV in the stated secured workload, in line with the Group's normal recognition policy.
Balance sheet and net cash
The average daily net cash from 1 January to 20 April was £288m (of which £68m was held in jointly controlled operations or held for future payment to designated suppliers). This represented an increase of £154m over the average for same period last year.
Based upon this and current forecasts to the year end, the average daily net cash for the full year is now expected to be in excess of £180m (FY 2020: £181m), significantly ahead of previous guidance.
John Morgan, Chief Executive, said:
"Since the start of the year, the positive momentum across the Group has continued to accelerate and with the Group geared towards demand for affordable housing, urban regeneration and infrastructure and construction investment, I am excited by the significant opportunities ahead.
Our high-quality secured workload and our operational delivery capabilities give us great confidence for the rest of the year and as such, we expect to deliver a full year performance significantly ahead of our previous expectations."
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
Rosie Driscoll
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK construction and regeneration group with revenue of c£3bn, employing around 6,600 employees and operating in the public, regulated and private sectors. It operates through five divisions of Construction & Infrastructure, Fit Out, Property Services, Partnership Housing and Urban Regeneration.