FORWARD orders worth £3.2bn, around £118m in cash reserves and almost £1bn of projects at preferred bidder stage, gives building group Morgan Sindall confidence for the future, ahead of an upturn in its markets.

The company announced a 13% fall in turnover of £2.21bn in the year to December 31 and a 28% decline in pre-tax profits of £44.7m.

But chairman John Morgan said: “These results reflect a very satisfactory performance in difficult trading conditions. We remain in a strong financial position and are well placed to take advantage of the opportunities which the market will present.

“The markets in 2010 will be similar to those we experienced in 2009, but we remain confident of making good progress throughout the year.”

He explained this year’s contraction in revenue and profit margins was linked to a decline in activities within the fit-out division, which saw a fall-off in the commercial office sector, and affordable housing, although increased activity in social housing managed to offset the decline in the open market.

Morgan Sindall has three main divisions across the region: affordable housebuilder Lovell, in Birkenhead; Liverpool-based construction arm Morgan Ashurst; and design, engineering and project management specialist Morgan Professional Services, in Birchwood.

Key projects currently under way across the three operations include two new schools worth £55m for Liverpool council, the first being a £37m replacement for Cardinal Heenan Catholic High School for Boys and Broughton Hall High School for Girls, in West Derby.

Lovell is delivering a large-scale regeneration at the Fiveways estate, in Rock Ferry, worth more than £37m, while the professional services team has almost £200m of projects including several building schemes for Warrington schools.

Liverpool stockbroker Panmure Gordon said the group’s results were in line with expectations.

“While volumes were a bit weaker than expected, operating margins were ahead.

“The maintained dividend means the shares continue to offer an above average 7.1% dividend yield.”

Analyst Andy Brown added: “We maintain our positive view on the stock and construction sector. Morgan Sindall’s diversified structure means it remains a solid play across the sectors’ activities.”