Interim Management Statement (7321R)
November 09 2011 - 2:00AM
UK Regulatory
TIDMMGNS
RNS Number : 7321R
Morgan Sindall Group PLC
09 November 2011
Morgan Sindall Group plc
9 November 2011
INTERIM MANAGEMENT STATEMENT
Morgan Sindall Group plc ('Morgan Sindall' or the 'Group'), the
construction and regeneration group, announces today its Interim
Management Statement covering the period 1 July 2011 to 8 November
2011.
Morgan Sindall remains on track to meet its expectations for the
current year. The macroeconomic environment continues to be
challenging but our financial strength, breadth of capabilities and
leading positions across a range of market sectors leave us well
placed to emerge from the current market a stronger business than
when we entered. In particular the benefit of our emphasis on
regeneration is seen in the growth in our regeneration pipeline
from GBP1.8bn to GBP2.2bn since the half year with a further
GBP0.9bn of regeneration opportunities currently at preferred
developer stage.
Construction & Infrastructure
This division's construction markets continue to be competitive
and impacted by public sector spending cuts, though commercial
activity is beginning to pick up gradually in London and the
South-East. Encouragingly, infrastructure markets remain healthy,
and the division expects to see opportunities in power
distribution, airports, rail and roads, where it has an established
track record.
In the second half of the year the division has continued to
secure key opportunities including appointment to a GBP150m primary
school framework for South Lanarkshire Council, a GBP750m Network
Rail framework under which the division will work on the Western
route in joint venture with Colas, and a place alongside our
Affordable Housing division on a GBP3bn framework for Birmingham
City Council. The division's forward order book is down from the
half year, but there are significant opportunities at preferred
bidder stage, including a GBP500m overhead line partnership for
National Grid in joint venture with Vinci Energies.
Affordable Housing
Affordable Housing's maintenance and new build social housing
markets have continued to be robust in the second half of the year
and, following the GBP560m allocation of funds to Registered Social
Landlords, we expect to see a number of new-build social housing
opportunities emerge in the coming months.
Conditions in open market housing continue to be constrained by
mortgage conditions albeit house sales and values have improved
through the summer and into the autumn. We continue to make good
progress with the recovery of the work in progress and debt
acquired in relation to the Connaught acquisition, the total
recovered currently standing at GBP19m, in line with our
expectations. The division's full service offering leaves it well
placed to target mixed tenure, new-build social housing and
maintenance opportunities and as well as major housing-led
regeneration schemes. Its forward order book has increased slightly
since the half year.
Fit Out
Fit Out's activity levels remain high and we believe that it
continues to take market share, although market conditions remain
highly competitive and constrained by the lack of major project
opportunities. The division's market leadership has enabled us to
continue to focus on profitable work, although we expect that
margins will remain subdued in the near term. Since the half year
the division's forward order book has recovered and it is in line
with the start of the year, with a reasonable level of workload
secured for 2012.
Urban Regeneration
With the Group's increased focus on regeneration, we are
benefitting from the skills and successful track record in Urban
Regeneration. The division has made good progress in recent months,
being named as the partner by Basingstoke and Deane Borough Council
for a major GBP200m redevelopment of over 15 acres to produce in
excess of 700,000 square feet of office space, and securing 3.5
acres of land in Chester with a view to creating a GBP115m, 500,000
square foot business quarter.
The division continues to build momentum across its portfolio of
regeneration schemes with more than double the amount of
construction on site than a year ago and with a number of schemes
securing planning in recent months. This is reflected in its future
regeneration pipeline increasing since the half year to GBP1.8bn
from GBP1.4bn with a further GBP0.5bn of schemes currently at
preferred developer.
Investments
Investments continues to work with our clients on alternative
funding structures for regeneration schemes in response to the
public sector spending cuts as well as demand from private sector
partners. Its regeneration pipeline currently stands at GBP0.4bn
with a further GBP0.4bn of schemes at preferred developer.
Overall we continue to pursue attractive opportunities across
all the Group's market sectors. We remain in a robust position with
a GBP3.3bn forward order book and a number of major contract
opportunities currently at preferred bidder, a growing regeneration
pipeline of GBP2.2bn and GBP0.9bn of regeneration schemes at
preferred developer stage, with average cash year to date at
GBP28m, reflecting ongoing investment in regeneration
opportunities. There has been no significant change in the Group's
financial position since the publication of the Interim Report for
the six months to 30 June 2011.
The Group remains confident of meeting its expectations for
2011. Whilst the current market conditions will constrain growth in
the near term we remain positive about the medium term prospects
for the Group with our increasing emphasis on regeneration.
- Ends -
Morgan Sindall Group plc Tel: 020 7307 9200
Paul Smith, Chief Executive
David Mulligan, Finance Director
Blythe Weigh Communications Tel: 020 7138 3204
Tim Blythe Mobile: 07816 924626
Ana Ribeiro Mobile: 07980 321505
Notes to Editors:
Morgan Sindall Group plc is a leading UK construction and
regeneration group operating through five divisions of construction
& infrastructure, affordable housing, fit out, urban
regeneration and investments.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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