Morgan Sindall profit jumps to £42m

Morgan Sindall’s latest margin of 3.2% shows a healthy improvement over the 1.9% figure the group produced four years ago. "We are in good shape," said John Morgan, executive chairman.

Latest financial results, for the 12 months to 31 December 2005, show turnover slightly ahead at £1.3bn with pre-tax profit jumping vigorously to £42m, representing a rise of 23% .

"I’m happy at where we are," said Morgan. "Two of our divisions, affordable housing and fit-out, are market leaders. We now aim to achieve the same status for the other two, construction and infrastructure services.

"If you want my overview of the group then the highlights are the fact that we have maintained our cash at £72m and the orderbook has risen to £2.8bn - it was £2.3bn a year ago."

In the fit-out division, the operating margin rose from 4.5% to 5.1%. "In 2004 we gained market share," said Morgan, "while in 2005 we both continued to gain market share and the market itself grew by 10%. Currently, I’d put our share of the sector at 16%."

Bluestone, the group’s construction business, has doubled its operating margin to 1%. Morgan sees a figure of around 1.5% as being the upper level. "Bluestone is comparable, in a way, to Kier Regional and upwards of a 1% margin is a good achievement for operating profit. Don’t forget that Bluestone also throws off cash."

Bluestone starts 2006 with a forward orderbook of £500m compared with £200m a year ago thanks to the securing of further framework and investment-led opportunities.