AGM and Q1 Interim Management Statement
Ahead of today's Annual General Meeting (‘AGM’), to be held at Jefferies Hoare Govett, Vintners Place, 68 Upper Thames Street, London EC4V 3BJ at 12.00 noon, Morgan Sindall Group plc (‘the Group’) announces its Interim Management Statement for the period from 1 January 2014 to date.
The overall Group performance in the first quarter of 2014 (‘Q1’) was in line with the Board’s expectations set at the time of the full year results on 18 February 2014 and expectations for the year remain unchanged.
The Group’s committed order book as at the end of Q1 was £2.6bn, up 9% from the year- end position, whilst the regeneration and development pipeline was up 2% at £3.1bn.
In Construction & Infrastructure, market confidence has continued to increase, however current margins across most sectors and activities remain tight, with inflationary cost pressures providing additional challenges as expected. The committed order book as at the end of Q1 remains strong, up 4% from the year-end to £1.6bn.
Fit Out has delivered an improved performance in the period, with its committed order book at the end of Q1 up 25% from the low year-end position. The division remains well-placed to benefit from the more positive market conditions, although tender pricing remains competitive.
Within the Construction & Services activities in Affordable Housing, margins in housing contracting remain depressed by the impact of localised labour and material cost inflation. In response maintenance, the focus continues on business development, which has led to some success in winning profitable new work in the period, and on improving operational inefficiencies which are continuing to impact performance.
The Regeneration mixed-tenure business within Affordable Housing, which incorporates the division’s open market developments, has performed as expected, with focus on the development and building out of existing and new schemes. Open market housing sales are benefiting from sales price inflation and continued support from ‘Help to Buy’, however total unit sales for the year will be constrained by the timing of construction completions.
As expected, the increased amount of activity on development schemes within Urban Regeneration which was reported at the year-end has led to completion on a number of phases and an improved performance when compared to the prior year period.
Investments has continued to secure future construction opportunities for the rest of the Group through advancing projects within its existing portfolio. Performance in the year is expected to reflect a lower level of profit generated from the disposal of investments compared to 2013.
Net debt as at 30 April was £6.2m. This includes £18.3m of non-recourse debt relating to specific projects in the Urban Regeneration division (‘non-recourse debt’).
Average daily net debt from the start of the year to 30 April was £1.3m (of which £11.3m is non-recourse debt). As previously indicated, it is expected that the average daily net debt will increase over the course of the year as further investment is made in Urban Regeneration and the mixed-tenure side of Affordable Housing.
NOTES TO EDITORS:
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK Construction and Regeneration group with a turnover of £2.1bn, employing around 5,700 employees and operating in the public and commercial sectors. It operates through five divisions of Construction & Infrastructure, Fit Out, Affordable Housing, Urban Regeneration and Investments.
Morgan Sindall Group Tel: 020 7307 9200
John Morgan, Chief Executive
Steve Crummett, Finance Director
Brunswick Tel: 020 7404 5959