Morgan Sindall posts 20% jump in profit

Morgan Sindall Group posted its half-year report for the six months to 30 June on Tuesday, with strong profit growth as group adjusted profit before tax rose 21%.

The firm reported improved cash management, with average net debt for the period down to £24m from £35m, and period end net cash of £36m - a turnaround from the net debt of £8m a year ago.

On a divisional basis, Morgan Sindall saw further growth from Fit Out, with adjusted operating profit up 11% to £11.5m, as well as continued recovery in Construction & Infrastructure, with adjusted operating profit of £3.2m, up from £0.3m.

The Property Services division finished ahead of its previous target, with adjusted operating profit of £0.1m compared to a loss of £0.8m in the comparative period.

Morgan Sindall said the benefits of its previous investment in Partnership Housing were supporting the division’s 21% increase in adjusted operating profit to £4.6m, from £3.8m.

The Urban Regeneration unit’s scheduled development completions are expected to result in a second half weighting, the board said, reporting adjusted operating profit of £4.6m, down from £5.0m.

Its interim dividend increased 8% to 13.0p per share, from 12.0p at the end of the first half last year.

“The group has delivered strong profit growth in the first half, with an improved cash position and lower average net debt across the period,” said chief executive John Morgan.

“All divisions have contributed, demonstrating the strategic and operational progress made across the group over the last few years.”

Morgan said the EU referendum result has introduced some uncertainty into Morgan Sindall’s markets, adding it was still too early to determine what the potential impact on the group will be in the medium and longer term.

“For the current year, however, based upon current trading patterns, our high quality secured order book and the visible pipeline of opportunities, the group is on track to deliver a full year result slightly above its previous expectations,” he explained.