Morgan Sindall Group PLC AGM and Q1 Interim Management Statement (2777E)
May 09 2013 - 2:00AM
UK Regulatory
TIDMMGNS
RNS Number : 2777E
Morgan Sindall Group PLC
09 May 2013
9 May 2013
Morgan Sindall Group plc
AGM and Q1 Interim Management Statement
Ahead of today's Annual General Meeting ('AGM'), to be held at
Jefferies International, 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 2013 to date.
Group Performance
Against the backdrop of continued difficult trading conditions
in most of its markets, Group performance in the first quarter
("Q1") was slightly below the Board's expectations. Although Group
revenue levels held up, Group margin was adversely impacted by
margin contraction in its Construction and Infrastructure and
Affordable Housing divisions.
The Group's forward order book as at the end of Q1 was GBP3.2bn,
up 6% from the year end position, reflecting positive levels of
selective bidding activity.
Operating Performance
In Construction and Infrastructure, the markets continue to be
highly competitive, with the operational focus being on careful
contract selection, cost and overhead management, and management of
cash in a challenging working capital environment. Margins continue
under pressure across all sectors, however the full impact of this
has been mitigated in part by the overhead cost savings derived
from the restructuring announced in November 2012.
Fit Out is focused on operational delivery and margin
improvement through selective tendering and has seen no significant
change in market conditions through Q1.
Affordable Housing has seen some recent improvement in market
conditions in its open market housing activities, as evidenced by
an increase in house reservations in Q1 compared to last year.
However, the benefit of this has been more than off-set primarily
by continuing significant pressure on construction revenue and
margins.
Returns from the division's mixed-tenure business, which is
focusing on larger and more complex schemes, are holding up well
and business development activity in this strategic and
increasingly important area remains encouraging.
There have been some important milestones achieved within Urban
Regeneration, with planning consents granted for new projects in
Lewisham, Chester and Doncaster; the commencement of the second
phase of construction at its Chatham Place, Reading development;
and the recent award of preferred bidder status on a significant
redevelopment project by Aberdeen City Council. The regeneration
pipeline at the end of Q1 was level with the year end at
GBP2.1bn.
Investments continued with its strategy of recycling its
invested capital, with the sale of its interest in the "Access for
Wigan" scheme. In addition, it has signed contracts for the Slough
LABV framework and the first three phases of the Bournemouth LABV,
both important projects which will secure future construction
opportunities for the rest of the Group.
Financial Position
Net debt as at 30 April was GBP23m. Average daily net debt from
the start of the year up to 30 April was GBP35m, reflecting the
ongoing disciplined focus on cash management.
During the period, the Group has entered into a GBP15m
three-year bilateral loan issued under the UK Government's Funding
for Lending Scheme arranged by Lloyds Bank Commercial Banking.
Total committed banking facilities are therefore increased to
GBP125m, which includes GBP110m of committed banking facilities
expiring in June 2015.
Outlook
General market conditions are expected to remain difficult
throughout 2013 and no significant short-term improvement is
envisaged. With positive momentum in the business evidenced by
order book levels and the operational focus on deliverable margin,
the Board is confident that the business is well-positioned to
benefit from profitable opportunities as they arise, with a strong
bias towards the second half of the year.
ENDS
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK construction and
regeneration group with a turnover of GBP2 billion, employing
around 6,500 employees and operating in the public and commercial
sectors. It operates through five divisions of construction and
infrastructure, fit out, affordable housing, urban regeneration and
investments.
ENQUIRIES:
Morgan Sindall Group Tel : 020 7307 9200
John Morgan, Chief Executive
Steve Crummett, Finance Director
Brunswick Tel: 0207 404 5959
Jonathan Glass
Nina Coad
This information is provided by RNS
The company news service from the London Stock Exchange
END
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