CONSTRUCTION group Morgan Sindall reported final results for the year to December 31 which showed a 6% boost to turnover of £2.22bn and a 2% fall in pre tax profits of £40m, although its affordable housing division produced a 14.1% rally in operating profits.
The firm operates an affordable housing operation for its Lovell brand in Birkenhead, Morgan Sindall construction offices in Liverpool and an office of its urban regeneration and property development company Muse Developments, which is developing St Paul’s Square in the city.
Chairman John Morgan said today: "We are pleased to report a solid set of results for 2011 in line with expectations, despite continued challenging markets.
"We are benefiting from being a broadly based business, offering creative, integrated solutions for increasingly complex projects, with a track record of delivery."
The group made cost savings of £9m during the year compared with £21m in 2010 and reduced its public sector exposure from 70% in 2009 to 50% last year, with further reductions expected in 2012.
It reports a stable forward order book of £3.4bn, compared with £3.6bn in 2010, and sees opportunities in the growth sectors of infrastructure and London commercial.
The group said today that the market remains challenging, but the medium-term outlook is more promising.
Construction and infrastructure operating profits fell from £26.9m to £21.1m on revenues of £1.26bn against £1.25bn; fit-out also saw operating profits fall from £14.8m to £12.4m, despite a 6% increase in turnover of £438m; affordable housing boosted revenues from £387m to £462m and achieved a 14% increase in operating profits of £18.6m; while urban regeneration saw operating profit almost double from £2m to £3.9m on increased revenue of £57m against £46m.
The Liverpool Morgan Sindall operation is involved in a £37m scheme to build a replacement Cardinal Heenan Catholic High School for Boys and Broughton Hall High School for Girls in West Derby and is continuing work on a £19m regeneration project in Stockbridge Village for Knowsley council.
Lovell is involved in £5.5m-worth of work on affordable housing schemes across the region and recently completed a £3.4m development of 36 new homes for Cosmopolitan Housing Association in Egremont, Wirral.
Liverpool stockbroker Panmure Gordon said today: "These are solid full year results from Morgan Sindall, in-line with expectations.
"Its broad divisional spread continues to give it a range of opportunities over the medium term. The immediate trading outlook, however, remains challenging and the outlook for earnings is muted."
However, it recommends a 'buy' call for the company's shares, based on the above average dividend yield.
