Morgan Sindall revenue soars | Construction News

Morgan Sindall’s chief executive said the company is ahead of expectations as its turnover soared to record levels in the first half of the year.

In financial results for the six months to 30 June, the contractor reported that its revenue had grown by 9 per cent, rising to £1.7bn from £1.6bn at the same stage last year.

This was despite the “inflationary pressures and supply issues” which it labelled a “significant headwind”.

Pre-tax profit rose at a slower rate, rising to £53.7m from £52.4m at the same stage last year – a 2 per cent increase. Operating profit rose by 4 per cent from £54.1m to £56m.

Its period end net cash figure shrunk by £63m however, falling from £337m in 2021 to £274m in June.

Commenting on the turbulent economic environment, the company said that it had offset rising costs on existing projects through “a combination of contractual protection, operational efficiencies and flexible sourcing”.

But it admitted that impact on margins had been “unavoidable” for projects where it had not been possible to mitigate for additional costs.

It warned that the “inflationary environment” continued to place some future project budgets under pressure, leading to some delays in decision-making and project commencement.

Its overall order book was valued at £8.5bn at the end of June. This was up 2 per cent from the same time last year, but 1 per cent lower than at the year-end position for 2021, which stood at £8.614m.

A similar trend was spotted for the firm’s construction arm. Its order book of £760m was up 17 per cent from the prior year when it stood at £648m, but down 6 per cent from the year-end position in December when it was £810m.

In this division, it noted significant work such as the £61m redevelopment of King Henry VIII Secondary School in Abergavenny, Wales, and the £12.5m Priscilla Bacon Hospice, a new state-of-the-art hospice on an eight-acre site in Norwich, Norfolk.

It also pointed to construction gaining a place on the £9bn Procure 23 framework, which is a partnership between Crown Commercial Services and NHS England and Improvement.

Chief executive John Morgan said: “With the more challenging economic backdrop, our strong balance sheet including a substantial net cash position is critical to operating efficiently and effectively. It allows us to continue making the right decisions and to best position us in our markets, giving us competitive advantage for continued sustainable long-term growth.

“Following our strong first half performance and with the current visibility we have of the rest of the year, we now expect to deliver a result for the full year which is slightly ahead of our previous expectations.”

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