Contractor reports 15% rise in full-year profit on back of increased public work but warns of 'challenging' year ahead
Contractor Morgan Sindall has reported a 15% profit boost in its full-year results but warned that the weak property sector will push 2009 results lower.
The firm said results for the year to 31 December 2008 were in line with expectations, largely thanks to a series of large public sector wins.
Pre-tax profit was £71.4m, up 15% on £62.1m in 2007, it said. Revenue rose 20% to £2.5bn, up from £2.1bn in the previous year.
The group said profit in its construction division grew by 94% to £9.5m on the back of strong public sector spending, particularly in education and healthcare. Profit in the infrastructure division rose more than one-third to £14.4m, thanks to increased demand in the transport, water and energy sectors.
But Morgan Sindall said its order book stood at £3.7bn - down 14% on last year's figure of £4.3bn - and warned that profit would drop in 2009 due to “challenging” conditions.
The contractor said: “We expect the strength in the infrastructure market and the ongoing weakness of the commercial property and open market housing sectors to continue, which will reduce the group's overall level of profitability in 2009 compared to the previous year.”
Executive chairman John Morgan added that the firm was “well placed” to ride out the economic crisis.
He said: “2008 has been an encouraging year for Morgan Sindall. We have delivered a record set of results in line with our expectations. Construction and infrastructure services divisions provided significantly increased profit contributions, which brings increased balance and resilience to our business, whilst our financial position remains robust.
“We continue to expect market conditions in 2009 to remain challenging, but we are well placed to emerge from these times as an even stronger business.”