Morgan Sindall 'on track to achieve a record year'

Morgan Sindall reports that it is “on track to achieve a record year in 2008”.

In an interim management statement issued this morning on the Stock Exchange, covering the period 1 July to 12 November, MS said that the group “continues to be well positioned as a result of its broad spread of activity across the construction sector”.

Fit Out

Delivering a strong second half performance. Its broad sector spread is helping to offset the impact of the downturn in the financial services sector.

The order book is comparable with the level at the start of the year.

Construction

Performing in line with expectations. With around 50% of its activity in the education sector and a further 20% in other public sector work, the division is well placed to benefit from any acceleration of the Government's spending plans.

In addition, with around 70% of its workload arising from framework arrangements, the division has good visibility on its expected revenues for 2009.

Infrastructure Services

Continues to benefit from a buoyant infrastructure market. Major projects are performing well and the division continues to have a healthy order book.

The division is currently targeting further major infrastructure opportunities such as Crossrail, the AMP5 work streams in the water sector, and tunnelling projects in the utilities sector. 

Affordable Housing

The refurbishment and new build social housing contracting business has continued to perform robustly.

Paul Smith, chief executive, said: “The government's reiteration of its commitment to the affordable housing sector is encouraging and we continue to believe that mixed tenure regeneration will drive growth in the longer term.”

The regeneration market continues to be subdued.

Smith said that the group's forward order book has softened slightly to £4.0bn from £4.2bn at 30 June. 

“In the current economic climate each of our divisions is putting an increased emphasis on cash management, cost reduction and supply chain improvements,” said Smith.

“The group remains financially robust with average cash balances for the year to date above the level achieved for the corresponding period in 2007 and with £75m of committed banking facilities in place, there having been no significant change in the group's financial position since the publication of the interim report for the six months to 30 June.”