Bluestone turnaround inches it out of the red

Morgan Sindall's losses in its construction division have been brought to an end - but only just - as turnover from Bluestone of £153m in the first half of 2003 generated an operating profit of £179,000.

Chief executive Paul Smith said: "We have further to go." In the comparable period last year, Morgan Sindall's construction problems were at their worst as a turnover of £167m produced a loss of £4m.

Bluestone has pulled out of pricing individual jobs and has focused on establishing framework agreements with clients in four key markets: NHS LIFT; education; property services; and industrial "sheds".

Despite the Bluestone subsidiary still being in turn-around mode, the Morgan Sindall group has sailed into calmer waters thanks to better results in two of its other operating divisions: infrastructure services and affordable housing.

Overall, Morgan Sindall's interim results (six months to 30 June) show a pre-tax profit for the group as a whole of £8.9m (up from £5.9m in the comparable period last year) on a turnover of £560m, some £40m higher.

The group's affordable housing business, Lovell, has a record orderbook of £735m.

Morgan Sindall has net borrowings of £18m, a result of the final payment of £6.8m under the £17m Pipeline Constructors Group acquisition and a further investment of £18.5m in affordable housing to cover work in progress. New medium-term banking facilities have been arranged, lifting the group's overdraft limit from £25m to £55m.