Morgan Sindall reports record results as profits double
Construction and regeneration group Morgan Sindall has hailed 2021 as “an excellent year for the group” following the publication of a record set of results this morning.
Group revenue rose 6% from 2020, delivering an adjusted operating profit of £131.3 million (FY 2020: £68.5m) on revenue of £3.2 billion (FY 2020: £3.0bn). The group reported a secured order book of £8.6bn, up 4% on the year end. With a strong balance sheet and net cash of £358m (FY 2020: £333m), the group said it is confident of achieving another good year of progress in 2022.
Chief executive John Morgan said: “2021 has been an excellent year for the group with progress across the board. Our record results reflect the high quality of our operations and the huge talent and commitment of our people. The group is in its best shape ever. Our strategic focus on construction and regeneration is driving positive momentum across the group and is enabling us to upgrade our divisional medium-term targets today which provide the framework for our next stage of growth.
“Underpinning these targets is our commitment to maintaining a strong balance sheet at all times and to hold a substantial net cash position. This continues to allow us to make the right long-term decisions for the business. We remain committed to delivering economic, social and environmental value for all our stakeholders, and to this end, we have made good progress towards achieving our ambitious target of achieving ‘net zero’ by 2030.
“We continue to make strong positive progress in our chosen markets, with the size and quality of our secured workload increasing in the year. This leaves us well-positioned for the future and on track to deliver a result for 2022 which is slightly above our previous expectations.”
Morgan Sindall Construction & Infrastructure grew its operating margin from 2.2% to 3.8%, while the fit-out business also improved from 4.6% to 5.6%.
This morning’s figures from the parent company Morgan Sindall also reveal that partnership housing specialist Lovell has doubled its profit compared to 2020.
Lovell had a very strong year, with significant strategic and operational progress made. Revenue for the year was up 21% to £572m (FY 2020: £474m). Operating profit increased substantially, more than doubling to £33.2m, an increase of 108% (FY 2020: £16.0m). The operating margin increased to 5.8%, up from 3.4% supported by the higher mixed-tenure and contracting revenue as well as benefitting from continued operational efficiencies.
The secured order book at the year-end was £1,498m, an increase of 4% on the prior year end (FY 2020: £1,445m).
Lovell regional managing director, Kevin McColgan, said: “Throughout the last two years, in the face of extremely challenging trading conditions, we have been relentless in our ambition to work with our partners to build the nation’s much needed homes. While our financial performance has exceeded previous results, it is the strength and unity of our team, that must be acknowledged for the successful delivery of over 3000 homes nationwide.
“We are in great shape, and we go from strength to strength, forming long term partnerships with other like-minded organisations, building on our reputation as a trusted and agile business. In just the last few weeks we have completed the handover of our Claish Farm development near Stirling and are thrilled to have received planning consent for our new development, Glow Garren in Hamilton. The site which was previously the Philips Lighting factory will now compose of 123 private and 40 affordable new homes. We are looking forward to starting on site this April, with first units ready by the end of this year.
“The future is incredibly bright for Lovell and as we enter a new phase in our growth strategy, we remain entirely focused on working in partnership to build many more high quality, affordable homes.”
Repairs and maintenance specialist Morgan Sindall Property Services (MSPS) said it contributed to the group’s strong results with its own resilient performance.
Alan Hayward, Morgan Sindall Property Services managing director, said: “2021 has been another challenging year with lots of uncertainty, but we have remained agile in our approach to delivering services to our clients and customers and supporting our colleagues.
“Our half year results reflect the continued hard work and commitment of the team, with revenue up 20% to £134m (FY 2020: £112m) with an order book of £945m.
“As a priority, we have continued to invest in technology and innovation with the launch of goldeni our technology platform. This innovation allows us to take a more proactive approach to repairs, by flagging potential issues in real-time, helping us spot potential indicators of vulnerability such as fuel poverty and support our colleagues in Group to achieve our net zero goal.”