Ahead of today’s Annual General Meeting (‘AGM’), to be held at Jefferies International Limited, Vintners Place, 68 Upper Thames Street, London, EC4V 3BJ at 10.00am, Morgan Sindall Group plc (‘the Group’) announces a trading update for the period from 1 January 2017 to date.
Trading for the financial year to date has been strong, with the positive momentum entering the year continuing throughout the period. Each division has performed as expected, with the overall Group result being driven by further margin and profit growth in Fit Out and the expected margin improvement in Construction & Infrastructure.
The Group’s committed order book as at 31 March 2017 was up 5% to £3.83bn from the year-end position, while the regeneration & development pipeline was up 2% to £3.28bn.
Construction Activities: The higher quality order book and improved operational delivery in construction has driven further margin growth in Construction & Infrastructure. Fit Out has had another successful period of winning work, with its committed order book as at 31 March up 17% from the year-end position, to a record £544m. This provides significant visibility for the rest of the year. Property Services has focused on the successful mobilisation of its contract wins from last year.
Regeneration Activities: Good progress has been made with Partnership Housing’s mixed-tenure housing developments, while the scheduled timing of scheme completions in Urban Regeneration remains in line with plans. Consistent with last year, both divisions are expected to show a second half weighting to results.
As at 31 March, the Group had net cash of £115m. The average daily net cash from the start of the year to 31 March was £154m, higher than previously expected due primarily to better working capital management in Construction & Infrastructure and Fit Out.
As a result of this cash performance, the Group now expects that the average daily net cash for the year will be in excess of £50m and, consequently, the net interest charge for the year will be lower than was previously anticipated.
Based upon the size and quality of the Fit Out order book and its operational performance to date, and with the lower net interest charge resulting from the better cash performance, the Group is on track to deliver 2017 full year results slightly ahead of its previous expectations set at the 2016 full year results on 23 February 2017.
John Morgan, Chief Executive, said:
“We have had a strong start to the year, and with our strategy geared towards those areas of the economy we expect to grow strongly, together with the size and quality of our order book and pipeline, we are confident that the momentum we have seen so far is set to continue.”
This announcement contains inside information.
The person responsible for this announcement on behalf of Morgan Sindall Group plc is Clare Sheridan, Company Secretary.