Firm had been expected to post £85m pre-tax profit this year
A bullish Morgan Sindall delivered more positive news for investors this morning when it said it was on track to beat its year-end forecasts.
In August, the firm posted another set of impressive figures with pre-tax profit up 19% to £35.5m on turnover flat at £1.4bn in the six months to June.
Full year pre-tax profit was upgraded at the time to around £85m from earlier predictions of £81m.
But in a trading update this morning, chief executive John Morgan said: “We now expect to deliver a full year performance slightly above the Board’s previous expectations.”
It said its construction and infrastructure divisions were expected to hike margins further this year with the pair having been given a medium-term target of 2.5% and 3% respectively.
In its half year results, Morgan Sindall said its construction business, which is working on a new secondary school (pictured) in Hackney, east London, and recently won a £27m deal to build a new secondary school in Neath, south Wales, posted operating margins of 2% while infrastructure posted 2.1%.
It said the divisions’ “contract selectivity and risk management and its full year performance is expected to show further margin improvement over last year”.
And it said its fit-out business would have a “strong performance” in the second half after workloads in the first six months slipped 4% to £407m with operating margins dropping to 4% from 4.4% last time.
Average daily net cash for the full year is expected to be in excess of £100m, higher than forecast at the half year.
Total secured workload for the firm in the nine months to September was £7.3bn, up 10% from the year end position.
By 10 45am, shares had risen 3.5% to 1346p on the back of the news.