BUILDING and maintenance group Morgan Sindall said it produced a “solid performance in line with expectations” for the six months to June 30.
Interim results released today showed an 11% improvement in sales of £1.08bn, although pre-tax profits fell 9% from £18.4m to £16.7m, mainly due to what the group describes as “continuing challenging market conditions which are impacting margins”.
However, it reports a strong order book of £3.5bn, and a regeneration pipeline of £1.8bn, with a further £800m of regeneration schemes at preferred bidder stage.
Chairman John Morgan said today: “Our broad sector spread, increasingly joined up approach and focus on more complex projects, has helped to underpin a solid set of results.
“While market conditions remain challenging, we continue to make the most of opportunities as they present themselves and invest in our businesses in order to position them for growth in the medium-term.
“We look to the future with cautious optimism and are confident that we are well positioned to deliver long-term sustainable growth.”
The group has shifted its emphasis from public sector work to more private sector opportunities in a bid to spread risk, although it maintained that it “remains in a robust financial position, with a healthy and stable forward order book”.
Morgan Sindall has three key elements based in the region: its construction arm has offices in Wavertree Technology Park; affordable housing division Lovell is based in John Street, Birkenhead; and the urban regeneration division Muse has a Warrington presence.
Construction saw operating profits fall from £12.2m to £9.5m on revenues of £617m compared with £612m.
The Liverpool office is involved in a £37m scheme to replace Cardinal Heenan and Broughton Hall schools for Liverpool council in West Derby; a £19m regeneration project in Stockbridge Village; construction of Croxteth Primary School, worth £4.6m; and a £2.8m deal with Land Securities to build a new unit at Chester’s Greyhound Retail Park which will house the first John Lewis At Home store in the North of England.
Lovell improved operating profits by 20% to £8.3m on turnover of £228m, compared with £173m. It reported a slight improvement in conditions for open market housing, although it still supports sales through shared equity and other initiatives for first time buyers due to poor mortgage availability.
One of its main city projects is a £3m design and build scheme creating 26 houses and apartments for Liverpool Housing Trust.
Muse produced a £1m operating profit, compared with £800,000, after sales rose from £15m to £19m.
It recently completed the final phase of the St Paul’s Square business district and has been selected as development partner by Warrington council for its £130m Bridge Street quarter regeneration scheme.
Liverpool stockbroker Panmure Gordon retained its ‘buy’ recommendation on Morgan Sindall’s shares today, saying: “The H1 results are in-line with expectations. While market conditions remain challenging, the group retains a solid order book and pipeline.”
