Morgan Sindall records near 50% leap in profits
Morgan Sindall has reported a 48% increase in profits following an “excellent” performance from its Fit Out division and notable contributions from its Construction & Infrastructure and Partnership Housing arms.
Announcing its preliminary results for the year ended 31 December 2017 today, the group revealed that its profit before tax of £64.9 million was 48% higher than the £43.9m in 2016.
Operating profit increased by 42% from £47.4m to £67.4m while revenue was up 9% to £2,793m (2016: £2,562m).
Divisional highlights included a 42% jump in operating profit from the Fit Out division to £39.1m (2016: £27.5m) and continued improvement in Construction & Infrastructure, which saw operating margin up to 1.5% (2016: 0.7%) and operating profit of £20.4m (2016: £8.9m).
A 5% growth in operating profit in Partnership Housing was impacted by lower fourth quarter completions while Urban Regeneration operating profit of £10m was in line with its schedule of development completions.
The Property Services division was impacted by restructuring costs in the year and so made a loss of £1.3m.
Chief executive John Morgan said: “These strong results are evidence of the significant operational progress being made across the group and are a testament to the high quality and commitment of our people.
“Our positive cash generation and increase in average net cash in the year has further strengthened our balance sheet and provides us with the flexibility to invest in our regeneration activities whilst allowing us to continue being highly selective with bidding in our construction activities.
“Looking ahead to 2018, we expect continued margin progression in Construction & Infrastructure, another strong performance from Fit Out, further growth from Urban Regeneration and Partnership Housing and positive contributions from Property Services and Investments.
“Consequently, we are confident of another good year of progress and with this positive momentum, are well-placed to deliver a result for the year which is slightly above our previous expectations.”
Partnership homes specialist Lovell has hailed its contribution to its parent group results, having delivered 1,757 new-build homes in 2017 including homes for open market sale and affordable homes.
Lovell’s combined national forward order book and regeneration pipeline now stands at £1.4 billion.
Lovell regional managing director, Stephen Profili, said: “The outlook for 2018 is highly encouraging as we continue to build urgently needed homes across Scotland. The forward order book for the Scottish business exceeds £119 million with the company set to complete more than 630 homes in Scotland this year, helping the Scottish Government meet its target of providing 50,000 new affordable homes by 2021.
“Lovell’s commitment to long-term partnership working is combined with the ability to bring forward land for development and create high-quality new homes across a range of tenures, from affordable housing to properties for sale on the open market, as well as provide housing refurbishment and planned maintenance services. We also work with central and local government partners to provide creative solutions for developing homes on public land – an approach which offers an important contribution to addressing the housing crisis.”