Company Announcements

2 November 2023

Morgan Sindall Group plc

Trading Update

Morgan Sindall Group plc ("the Group") today provides an update on current trading and the outlook for the 2023 financial year.

Group performance and outlook

Since the time of the half year results on 3 August 2023, general market conditions have remained challenging yet manageable. Based on the performance to date and with good visibility of secured orders through to the end of the year, the Group remains on track to deliver a full year performance in line with its expectations, with strength in Fit Out, Construction and Infrastructure offsetting a weaker performance in Property Services.

Divisional summaries

Both Construction and Infrastructure have performed better than expected, with each continuing to benefit from their ongoing focus on long-term client relationships, operational delivery and risk management.

Fit Out has continued to trade strongly and with the visibility of its order book for the rest of the year, it is now well-placed to deliver a result for the full year which is slightly above the top end of its medium-term target¹.

In Property Services, contract performance has remained difficult. Although the remediation programme being implemented to address operational delivery and contract pricing has made some positive progress, this has been slower than expected and the loss in the year is now anticipated to be higher than previously expected.

Partnership Housing has progressed as planned, with the focus on long-term partnerships with the public sector continuing to provide some resilience against the softer housing market. Average capital employed for the year is expected to be c£250m.

In Urban Regeneration, progress on the various schemes within its development portfolio has been broadly as expected, albeit procurement and planning processes are increasingly protracted. Average capital employed for the year is expected to be c£100m and the return on capital expected to be around the 'mid-teens'.

¹ Fit Out's medium-term target is annual operating profit within the range of £50m-£70m

Group secured workload

The Group has a growing and high-quality workload. The total secured order book for the Group at 30 September 2023 was £9.1bn, up 7% from the year end position (level with the half year).

Balance sheet

The average daily net cash for the period from 1 January to 27 October was £275m (of which £44m relates to amounts held in jointly controlled operations or held for future payment to designated suppliers).

The average daily net cash for the full year is expected to be around £270m, slightly higher than previous guidance.

John Morgan, Chief Executive, said:

"General market conditions remain challenging yet manageable. Against this backdrop, our high-quality secured order book and our operational delivery capabilities give us great confidence for the rest of the year and we're on track to deliver a full year performance which is in line with our expectations."  

ENDS

Note to Editors

Morgan Sindall Group

Morgan Sindall Group plc is a leading UK Construction & Regeneration group with annual revenue of £3.6bn, employing around 7,600 employees and operating in the public, regulated and private sectors.  It reports through six divisions of Construction, Infrastructure, Fit Out, Property Services, Partnership Housing and Urban Regeneration.