Morgan Ashurst: Amec contribution lifts margin

Morgan Ashurst’s ability to generate a decent profit margin last year was a tale of two distinct parts, because while the existing operations could manage a modest figure of 1.1%, the livelier bolt-on operations acquired from Amec fared much better with a 3.0% margin.

Morgan Sindall’s construction division traded as Bluestone up until the middle of last year but then the group bought various chunks of Amec as it quit the construction sector.

One of these (Amec’s Design and Project Services) was added to Bluestone and a name change resulted in the introduction of the new name of Morgan Ashurst.

Morgan Ashurst’s financial results covering the 12 months to 31 December 2007 show:

Turnover:  

• existing operations - £446m
• acquisitions - £166m

Operating profit: 

• existing operations - £4.7m
• acquisitions - £5.1m

Previously Bluestone’s markets had been:

• health
• education
• light industrial
• property services

The Amec deal added four more sectors:

• defence
• retail
• pharmaceutical
• manufacturing

The deal has also lifted Morgan Ashurst’s project capabilities to include schemes of more than £300m.

The acquisition added £5.1m to operating profit though this was partially offset by integration costs incurred during the five-month period to December of £2.1m.

Morgan Ashurst began 2008 with a forward orderbook of £800m (comparable figure at the end of the previous year: £490m) with the acquisition accounting for £320m of this increase.

The company showed itself to be quick to pay its suppliers, with the number of creditor days outstanding being equivalent to just 25 days’ purchases.