Waste and energy among sectors contractor is set to focus on after reporting 28% drop in pre-tax profit
Morgan Sindall is set to shift its focus to new areas of infrastructure work in a bid to minimise the fall-out from a decrease in public spending.
The company, which this week reported a 28% drop in pre-tax profit in 2009 to £44.7m from £62.3m, said it would concentrate the infrastructure arm of its business Morgan Est on growth areas such as waste, energy, rail, electricity transmission and distribution upgrades.
Last month Morgan Est restructured its business into four main areas – tunnelling, capital projects, infrastructure services and utility services.
Mark Cutler, managing director of Morgan Est, said one of the main strategies was to transfer skills from the water sector to the waste sector. In an internal memo seen by Building he added: “This will also allow the utility services business unit to focus its resources on the considerable growth prospects in energy distribution and transmission.”
On the back of the results for the year ended 31 December 2009, John Morgan, chair of Morgan Sindall, said the £3.2bn order book for 2010 was promising, but that government expenditure “has already been falling”.
He added: “I suspect the government cuts will cut more deeply in 2011 and we will deal with that as it comes.”
Meanwhile, the firm said work in the fit-out sector – traditionally one of the biggest markets for its Overbury arm – should see an upturn in 2010.
Morgan added: “Over 2009,fit-out decreased by 40%, which is the biggest drop we’ve seen in the 30 years we’ve been in the sector. But we expect a recovery in 2010, with more work coming from the financial services sector.”
Morgan refused to be drawn on any acquisition plans, despite reporting a £118m cash chest and £100m of committed facilities. He added: “We are not necessarily making acquisitions, but we are open to any opportunities. We have the fire power, if needed.”
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