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Morgan Sindall upbeat despite loss

money

Morgan Sindall made a pretax loss of £14.8M in 2015, compared to a £22.8M profit in 2014.

However the company was upbeat, with adjusted operating profit up almost £10M year-on-year to £38.8M.

The loss was down to an exceptional operating item relating to old contracts at the Faslane Naval in West Scotland.

Chief executive John Morgan said: “Looking ahead to 2016, the positive momentum across the group is expected to continue.”

He added: “With a further steady recovery in the performance of construction and infrastructure also expected, the group is in a strong position to deliver on its expectations.”

The construction and infrastructure division showed improvement in the second half of the year, delivering a full year operating profit of £3.8M compared to profit of £300,000 at the half year stage.

The firm said old contracts and low returns from deals in the South and London hit figures in the first half of the year, although in the second half much of these projects were completed and replaced with higher quality work.

New project starts include the £290M A6 Manchester Airport Relief Road joint venture. In aviation, Morgan Sindall is one of four working on the £1.5bn programme of upgrades and improvements at Heathrow Airport. It said tunnelling also remained a key activity, including its role on the £300M to £500M west section of the Thames Tideway Tunnel.

The cost of the exceptional operating item was £7.5M more than the £39.4M announced at the half-year.  It relates to two construction projects which Morgan Sindall took over when it bought Amec’s design and project services division in 2007. They were for the design and construction of a floating jetty and construction of living accommodation and infrastructure, both around the Faslane Naval Base in West Scotland. The cost of completing one of these contracts has now been agreed.

 

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