Pre-tax profits at Morgan Sindall have jumped in a bumper first half of 2017 to reach £23.1M, compared to £15.4M in the first half of 2016.
The firm’s strong performance was attributed to its construction and infrastructure sector, which has seen its margins improve from 0.5% in 2016 to 1.1% after becoming more selective in new work it takes on. Its order book at 30 June was up 5% on last year to £3.8bn.
In November 2016 Morgan Sindall won the central enabling works contract for HS2 as part of a joint venture with Bam Nuttal and Ferrovial Agroman, providing Morgan Sindall £100M per year across four years. In January its highways sector won a place on Transport for London’s Surface Transport Major Projects framework, worth £500M across four years.
Operating profit for the sector was up 138% on the previous year at £7.6M while Morgan Sindall’s fit out sector, focusing on refurbishments, has seen revenue increase 15% to £339M from £294M in 2016.
However, its urban regeneration sector performed worse than last year, generating £2M of operating profit as opposed to £4.6M this time last year. The group explained this was due to a majority of projects favouring the second half of the year; current activity in the sector is expected to push profits up in 2018.
“This is a strong set of results, driven by another period of margin and profit growth in fit out and further progress on margin recovery in construction and infrastructure”, said Morgan Sindall chief executive John Morgan.
“With the current trading patterns in fit out and the forward visibility provided by the size and quality of its order book, together with further margin improvement in construction and infrastructure and an increase in scheme completions in partnership housing and urban regeneration, we are confident of another strong performance by the group in the second half.”
Pictured is a £100M project to refurbish the Oldbury viaduct on the M5 in the Midlands, which is being undertaken by BAM, Morgan Sindall and VolkerFitzpatrick.