Trading update reports trading uplift but outstanding concern over spending cuts
Morgan Sindall has boosted its order book from £3.2bn to £3.5bn since the start of the year but said concerns remain over the extent of public spending cuts.
In a trading update for the six months to 30 June this morning, it said its fit-out division was benefitting from demand for larger projects and its newly combined construction and infrastructure had converted its entire 900m of preferred bidder opportunities into wins since January.
The company said the uplift in trading would offset the £2m net cost of integrating the construction and civil engineering divisions.
The statement said: “Uncertainties remain about the precise impact of the planned cuts in public spending and the group continues to monitor the situation closely and to develop contingency plans accordingly.”
Along with all major contractors, Morgan Sindall is waiting for clarity from the coalition government over the extent and nature of public spending cuts. More information may come about the Building Schools for the Future programme in future weeks. Many companies hope the autumn comprehensive spending review will provide detailed information that will enable them to tailor their business plans accordingly.
The company said its wide spread of sectors left it “well positioned to face the challenges ahead and to benefit from opportunities as they present themselves.”
The statement said net cash at the half-year would be above £100m, which it said was “significantly ahead” of market expectations.
This week the company spent £6.6m buying Powerminster from MJ Gleeson to boost the planned and response maintenance capability of its Lovell affordable housing arm.