Firm says construction and fit out businesses beating expectations
Fit out accounted for nearly 40% of Morgan Sindall’s business in the first half with the ongoing boom in the sector meaning the firm has lifted its medium term operating profit target by a third.
The wider business posted a record set of interim results with turnover up 8% to £2.6bn in the six months to June with pre-tax profit jumping 22% to £116m.
Fit out saw another standout performance with revenue up 19% to £996m and operating profit rising 19% to £69m.
Morgan Sindall said that as a result, it has now lifted its medium term target for operating profit at fit out to between £100m and £130m from a previous range of £80m-£100m.
The firm has also lifted its medium term goal for construction with this business now being handed a target of an operating margin of between 3.5%-4% annually from a previous estimate of between 3% and 3.5%.
Revenue at its construction business in the first half was up 18% to £742m with operating profit jumping 47% to £24m.
Chief executive John Morgan said: “The medium-term fundamentals for fit out remain strong and in construction, we have continued to benefit from ongoing government investment commitments.”
Morgan Sindall’s partnership housing business slipped 14% to £347m on operating profit flat at £13m.
The firm added: “As near-term consumer confidence is expected to remain subdued due to wider economic uncertainty, operating profits for the full year are now anticipated to be slightly below the prior year.”
But Morgan said the group would meet its full-year targets, adding: “The strength and breadth of our diverse operations, together with the visibility provided by our high-quality order book for the remainder of the year, we remain confident that our full year performance will be in line with our current expectations.”
Morgan Sindall said it increased its interim dividend by 10% to 55p with the firm’s order book at the half year up £200m to £12.2bn with its preferred bidder workload up £7.3bn to £19.5bn.
Analysts are expecting the firm’s 2026 revenue to be around £5.2bn with a pre-tax profit of £235m.
In a note, broker Investec added: “Another very strong and record set of interim results, better than we expected at the profit level. Full year consensus looks very well underpinned and the bottom end of the range could edge up, with a better fit out and construction better offsetting slightly weaker partnership housing.”
Morgan Sindall’s net cash at the half year was up 7% to £418m with its average daily net cash during the period rising 19% to £423m.
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