AGM Trading Update: "A strong start to the year"

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 an update on trading for the period from 1 January 2019 to date.

Group performance & outlook

The Group has had a strong start to the year and all divisions have made further positive operational and strategic progress.

The committed order book as at 31 March 2019 increased by 8% from the year end position to £3.8bn. The regeneration & development pipeline grew by 2% from the year end to £3.2bn.

Based upon the performance to date and the current visibility of future workload, the Group is on track to deliver a full year performance in line with its expectations and with more of a weighting towards the first half than in previous years.

The Group’s cash position remains strong. Average daily net cash since the start of the year to 30 April was £138m, an increase of £12m over the same period last year. As a result, it is expected that the average daily net cash for the year will be in excess of £85m.

Divisional highlights

Construction & Infrastructure has continued its focus on contract selectivity and operational delivery and is anticipated to deliver the expected margin improvement in the year.

Fit Out has performed as expected against the predicted backdrop of a general tightening in overall market conditions.

Property Services is delivering its expected margin growth and is the most significant contributor to the growth of the Group order book.

Partnership Housing has performed as planned and is beginning to deliver the expected improvement in its operational delivery. The estimated average capital employed for the full year remains at c£150m, with an increase in investment expected across the rest of the year as its developments progress.

The timing of developments and scheme completions in Urban Regeneration have progressed as scheduled, with average capital employed for the year expected to be c£95m, as previously guided.

In March, it was announced that Investments had been selected as Brentwood Borough Council’s preferred joint venture (JV) partner to deliver a long-term programme of developments with a potential contract value of up to £1bn, further demonstrating the division’s strategic importance to the Group. No value is yet attributed to this JV in the committed order book or regeneration & development pipeline, in line with the Group’s normal recognition policy.

John Morgan, Chief Executive, said:

“We have had a strong start to the year and the positive momentum coming into 2019 has continued. Our order book is showing good growth and our balance sheet and cash position are in very good shape. We are therefore excited by the opportunities ahead in each of our markets.”