Morgan Sindall Group PLC Trading Update (9874E)
November 02 2022 - 3:00AM
UK Regulatory
TIDMMGNS
RNS Number : 9874E
Morgan Sindall Group PLC
02 November 2022
2 November 2022
Morgan Sindall Group plc
Trading Update
Morgan Sindall Group plc ("the Group") today provides an update
on current trading and the outlook for the 2022 financial year.
Group performance and outlook
Since the time of the half year results on 4 August 2022,
increased general market uncertainty together with continued
inflationary headwinds have provided for a more challenging
economic backdrop. Notwithstanding this, trading across the Group
has been robust and with its high-quality secured workload giving
good forward visibility, the Group is on track to deliver a full
year performance in line with its expectations.
Trading has been as expected in Construction &
Infrastructure. The Construction activities are expected to deliver
an operating margin for the full year within its target range of
2.5%-3% and the operating margin in the Infrastructure activities
is also expected to be within its target range of 3.5%-4%.
Fit Out 's continued focus on operational delivery and customer
experience, together with its order book for the rest of the year,
means it is well-placed to deliver a very strong full year
performance.
In Property Services, contract phasing and mobilisations is, as
anticipated, driving slightly higher second half activity, although
its operating margin continues to be impacted by general cost and
labour inflation.
Partnership Housing has experienced a recent reduction in sales
activity in line with the rest of the UK housing industry, however
its focus on long-term partnerships with the public sector provides
forward visibility and resilience. Average capital employed for the
year is expected to be cGBP190m-GBP200m.
Urban Regeneration's active development schemes have progressed
to plan, however inflation and interest rate increases are
providing some scheme viability challenges. Average capital
employed for the year is expected to be cGBP90m-GBP95m.
There has been no change to the previously announced estimate of
building safety costs and the costs of applying the principles of
the Building Safety Developer's Pledge across Partnership Housing
and Urban Regeneration. These are still expected to be in the range
of GBP40m-GBP50m and will be shown separately as exceptional
provisions/expenses in the appropriate period(s).
Group secured workload
The Group has a sizeable and high-quality workload. The total
secured workload for the Group at 30 September 2022 was GBP8.8bn,
up 2% from the year end position (up 3% from the half year).
Within this, the construction secured order book of GBP4.6bn was
up 2% from the year end (down 1% from the half year) and the
regeneration secured order book of GBP4.2bn was up 3% from the year
end (up 8% from the half year).
Balance sheet
The Group's balance sheet remains strong and in an uncertain
trading environment, the holding of a significant cash balance is
more of a competitive advantage than ever.
The average daily net cash for the period from 1 January to 28
October was GBP260m (of which GBP62m was held in jointly controlled
operations or held for future payment to designated suppliers).
As previously guided at the time of the half year results, the
average daily net cash for the full year is expected to be around
GBP250m.
In addition, the Group has significant undrawn bank facilities
available to it. These total GBP180m , of which GBP165m mature in
2025 and GBP15m in 2024.
John Morgan, Chief Executive, said:
"In recent months, increased general market uncertainty together
with continued inflationary headwinds have provided for a more
challenging economic backdrop.
Despite this, trading across the Group has been robust and with
our high-quality secured workload giving good forward visibility,
we're on track to deliver a full year performance in line with our
expectations."
ENDS
Morgan Sindall Group Tel: 020 7307 9200
John Morgan
Steve Crummett
Instinctif Partners Tel: 020 7457 2020
Matthew Smallwood
Bryn Woodward
Note to Editors
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK Construction &
Regeneration group with annual revenue of GBP3.2bn, employing
around 7,200 employees and operating in the public, regulated and
private sectors. It reports through five divisions of Construction
& Infrastructure, Fit Out, Property Services, Partnership
Housing and Urban Regeneration.
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END
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