CONSTRUCTION and housebuilding group Morgan Sindall says it is well positioned to meet future challenges, in a trading update today.
The group, which has a construction office on Liverpool’s Wavertree Technology Park and an affordable housebuilding operation in Birkenhead, said it remains on track to achieve expectations for the current year, in a statement ahead of its annual results announcement in February 2011.
“Our financial position remains strong, with average cash in the second half of the financial year set to be in line with that achieved in the first half and with £100m of committed banking facilities in place.
“Our order book remains consistent with the position at the half year, providing us with good, long-term visibility.”
The group said its construction and infrastructure division is trading positively with “reasonably firm” revenues in the short term, although it adds the medium-term prospects remain challenging due to the public spending cutbacks announced in the Government’s October comprehensive spending review.
However, it said the cuts were in line with its expectations and believes new financial models will emerge to fund building projects, such as a partnership it has forged with Bournemouth council to meet regeneration needs through private finance.
And while the open market housing sector remains subdued, the group said affordable housing is making good progress integrating the contracts it recently secured from failed building and maintenance group Connaught.
“The affordable housing market remains robust with a reasonable pipeline of new build social housing, response and planned maintenance opportunities.”
Looking forward, the group said it has made good strategic progress this year.
“Our £3.6bn forward order book, breadth of capabilities and leading positions across a range of market sectors leave us well placed to capture further market share.
“Overall, we are well positioned to meet the challenges and opportunities in 2011 and beyond.”
Panmure Gordon, the Liverpool stockbroker, welcomed today’s update, saying: “We continue to believe that the combination of its broad range of construction activities along with its recently enhanced social housing offering makes it an attractive investment.”
