Morgan Sindall merger costs to hit £6m

Aaron Morby 13 years ago
Share

Morgan Sindall expects the final bill for merging its infrastructure and construction divisions to hit £6m.

In the latest set of half-year results, the firm said the heavy one-off cost would be offset by a £6m saving in annual overheads.

Already the contractor has spent £1.7m of the expected total bill for restructuring the two businesses under the new Morgan Sindall banner.

Group profits for the first half of 2010 slid 10% to £23.1m on turnover down 14% to £980m.

The fall in profits and sales was largely down to the new division, where civil engineering experienced a tough time following major infrastructure project delays and the AMP5 water spending review.

Construction businesses, largely Morgan Ashurst, in the new division delivered a record first half profit of £6.3m, up 11% on the previous year, with margins edging up to 1.8%.

But a hiatus in water spending and other civil engineering projects saw profits fall a third to £5.9m at the infrastructure business.

Despite the challenging outlook for this part of  Sindall, the  order book is up 31% at  £2.1bn on the start of the year.

Morgan Sindal half year results by division

  • Construction Turnover £612m (£797m) : Profit £12.2m (£15m)
  • Fit-out Turnover  £179m (£160m) : Profit £6.9m (£7.4m)
  • Affordable housing Turnover £173m (£178m) : Profit £6.9m (£7.1m)
  • Urban regeneration Turnover £15m (£5m) : £0.8m (-£1.1m)

John Morgan, executive chairman, said: “While we are conscious that market conditions remain challenging, our financial strength, breadth of capabilities and leading positions across a range of market sectors leave us well placed to capture further market share.”We look to the future with confidence.”

He said that as expected the construction group saw softened demand as public spending cuts began to have an impact.

Fit out benefitted from a recovery in demand for larger projects in London, with the professional and financial services sectors leading the increase in activity.

In affordable housing, demand for new build social housing and refurbishment has remained firm although the private housing market remains constrained by the lack of availability of mortgage finance.

Despite the fall in turnover Morgan Sindall, cash at June stood at £138m, up nearly £50m on last year.

An increase in revenue from fit out and careful management of housing inventories at the affordable housing division saw average cash treble to £61m, compared to the previous year.

Latest news

Graham hospital site hut complex destroyed by blaze

Site offices ravaged by fire which took eight hours to get under control
4 hours ago

Mace wins £150m over-station job at Liverpool Street

Latest win from Aviva Investors and Allianz Real Estate following earlier Moorgate contract
5 hours ago

Buyers see brighter days ahead despite resi slump

"Construction can see a path through for better outcomes in 2023"
8 hours ago

Australian firm to buy £300m gigaplant backer Britishvolt

New owner vows to complete giant factory in Northumberland
11 hours ago

Project delays curb Ardmore growth ambitions

Refurb and housing specialist sees profit fall after challenging year of delays and supply chain failures
11 hours ago

Scaffolders and sparks strike at antibiotic plant

Engineering construction workers down tools in bonus pay row
10 hours ago

McAlpine bags £1bn Sellafield concrete structures deal

Contractor signs 17-year concrete structures and groundworks framework
20 hours ago

Moving in to new markets paying off for McLaren

Contractor carving out new niche as leading player in heavy refurbs
3 days ago

Heavy materials sales fall amid slowdown in starts

Light side product sales grow helped by pace of activity for refurbs and energy-efficient retrofits
10 hours ago

Plan to add retentions record to payment reporting law

Government consults on tougher reporting to include disputed invoices and retention policies
3 days ago

Morgan Sindall wins £88m Beckton DLR depot upgrade

Delayed work to start on Docklands Light Railway train maintenance depot in East London
3 days ago

Hare and Severfield win £250m Sellafield deal

Country's two biggest steelwork contractors secure 17-year framework
3 days ago

Max Steward returns to head up ISG’s Agility fit-out arm

Former ISG project director returns after three years to take up MD role
3 days ago

McLaren wins massive Portland House refurb

Construction to start this year on £380m revamp of 28-storey building in central London
4 days ago

Green light for £275m HS2 Midlands nerve centre

Trio of contractors battling it out to win huge new depot near Birmingham
4 days ago

Winners named for Government £10bn offsite framework

29 firms secure places on mega framework for schools, healthcare, defence and justice jobs
4 days ago

ISG, Amey and Costain now industry’s quickest payers – list

Average payment times from main contractors slip by a day
5 days ago

Staff at Outco Surfacing start looking for new jobs

Administration notice filed two years after acquisition of NMC Group
4 days ago

£4.75m building work provision tips Higgins into the red

Partnerships business counts cost of changes to building safety rules
4 days ago

John F Hunt snaps up London temporary works design firm

Demolition contractor buys geotechnical and structural engineering design specialist RKD Consultant
4 days ago

Vital Energi lands £13m package at Plumstead regen site

Specialist will start on site this summer helping to transform the former home of Arsenal FC
4 days ago

Galliford Try to start £14m Scunthorpe Market scheme

Firm will build NHS staff accommodation and offices in two phases
4 days ago

Vast £500m British Library expansion go-ahead

London Mayor still needs to give final nod to 800,000 sq ft extension at St Pancras site in London
5 days ago

Wates names new chief executive

Cork-born Eoghan O’Lionaird to join later this month
5 days ago

Keltbray director joins Barhale as North East chief

Mark Wood heads operations in Yorkshire and North East England
5 days ago

Major London City building green deep retrofit approved

St Bride’s Tavern near Fleet Street will be demolished for the building expansion
5 days ago

Gilbert Ash lands starring role in £38m Welsh theatre revamp

Contractor to start work this year on Theatr Clwyd upgrade
5 days ago

Property clients to ramp up spending on decarbonising

Survey reveals nearly half of property chiefs plan to speed up spending on net-zero programmes over next twelve months
5 days ago

Average self employed labour rates top £1,000 a week

Average weekly earnings reach high for skilled trades
6 days ago

BAM wins £49m Harrogate Convention Centre revamp

Local council hopes to sanction work start this autumn
6 days ago

Contractor services