Ongoing fit out boom and improved construction performance behind rise
Morgan Sindall said it will beat profit targets this year thanks to an ongoing boom in fit out and an improved performance from its construction business.
In a trading update this morning, the FTSE 250 contractor said: “Strong trading momentum has continued [since its interim results on 29 July] and, together with strong visibility of secured orders through to the end of the year, the Group now anticipates that its full year results for 2026 will be slightly ahead of its previous expectations.”
It said fit out’s numbers will be “slightly ahead” of the £140m profit it made last year while operating margins at the construction business are “now expected to be at the upper end of the 3.5%-4.0% medium-term target range, reflecting the division’s disciplined approach to bidding, delivery and risk management”.
Morgan Sindall said its infrastructure business would post double digit profit growth on the back of last year’s £37m with operating margins at the upper end of its 3.75% to 4.25% target.
But it said profit at its partnership housing business was “now expected to be below previous expectations, reflecting prevailing market conditions of low consumer sentiment and affordability pressures”.
The firm added that prospects for 2027 were on track and said: “The strength and breadth of the Group’s diverse operations, the visibility provided by its high-quality order book for the forthcoming year, and alongside the self-help measures already taken accompanied with the capital allocation discipline in place, [mean] the Group remains confident that the outlook for 2027 will be in line with current expectations.”
Broker Investec said a £75m share buyback “reflects a view there is surplus cash” and in a note said it expected 2026 profit to be 2% to 3% ahead of expectations forecasting a pre-tax profit of £239m on turnover of £5.2bn.
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