Morgan Sindall upgrades profit forecasts

Grant Prior 3 years ago
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Morgan Sindall will restart paying dividends to shareholders after a strong recovery from the first pandemic lockdown.

And the contractor is confident the latest lockdown which starts tomorrow will have “minimal impact” on the business.

A positive trading update this morning predicted full year results to December 31 2020 will be “slightly above” the £60m forecast this summer.

Construction and infrastructure is trading strongly delivering profit margins above 2% alongside a secured order book of £3.8bn.

Fit Out has an order book 15% below last year’s levels but “this is more than offset by the value of projects at preferred bidder stage.”

Morgan Sindall added: “In addition, the value of tenders due in the final quarter of the year is 18% higher than for the same period last year.”

The firm also confirmed it has now paid back the £9.5m in furlough cash claimed earlier this year while daily net cash levels in the business hit £150m.

John Morgan, Chief Executive, said: “Following the disruption earlier in the year, all of the Group’s activities are now fully operational again and delivering high levels of productivity.

“We welcome the Prime Minister’s clear statement that construction activity should continue through the new lockdown restrictions in England for November and we anticipate operating safely throughout with minimal impact.

“Our high-quality secured workload gives us good visibility for the rest of the year and as such, we now expect to deliver a full year performance slightly above the top end of our previous expectations.

“Our strong cash generation, position and balance sheet remain key differentiators. These, together with the improved outlook for the year, have enabled us to repay furlough monies and resume dividend payments as declared today.

“Despite the uncertainty that the pandemic brings, we have a sound platform for future growth with the Group geared towards future demand for affordable housing, urban regeneration and infrastructure and construction investment.”

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