Results for the half-year to June 30 2020 show Covid-19 caused a drop in pre-tax profit to £13.6m from £35.5m last time as revenue dipped to £1,363m from £1,421m.
Morgan Sindall said it can now reinstall financial guidance for the rest of the year and is looking to post pre-tax profits of £50m-£60m in 2020.
Chief Executive, John Morgan said: “We now have greater clarity of the extent of the impact of Covid-19 on the current year’s performance and on the assumption of no further significant business interruptions arising from any widespread secondary lockdown, we expect profit before tax for 2020 to be in the range of £50m-£60m.”
The news went down well in the City where Morgan Sindall’s share price rose 11% in early trading.
At the peak of lockdown Morgan Sindall placed 1,900 employees on furlough and received £9.3m under the government’s Coronavirus Job Retention Scheme.
Now 200 employees remain on furlough and the company intends to pay the furlough cash back to the government during the second half of the year.
Morgan Sindall managed to improve its payment performance to suppliers during the first six months with construction and infrastructure invoices now paid in 27 days down from 32.
The company said: “The Group’s relationships with its supply chain partners are of strategic importance and its actions and behaviours towards them during these challenging times are viewed as key to the Group’s future success.
“Consequently, the prompt payment of its suppliers has remained a major area of focus throughout the period and even more so against the current backdrop of Covid-19.”
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Morgan Sindall’s current order book stands at £7,962m – up 5% from the year end.
Morgan said: “Our proven strategy remains the same, based on organic growth and operational improvement.
“We have a balanced business geared towards future demand for affordable housing, urban regeneration and infrastructure and construction investment. Together with our high-quality secured workload, we are confident of future growth and success.”
