Competition squeezes Morgan Sindall margins

Morgan Sindall confirmed a drop in operating margins today as a result of an increasingly competitive marketplace.

News of the fall-off was included in the company’s trading update for the six months to 30 June, which revealed the firm is trading in line with expectations and has a healthy forward order book.

The statement added: “Overall we have had a positive first half of 2011 and, with our track record in growth sectors, broad sector spread and depth of capabilities, we remain well positioned to face the challenges ahead and to benefit from opportunities as they arise.”

During the period the construction division was successful in securing positions on a number of number of frameworks including places on two lots of the £500m Smarte East Alliance framework and on the £400m, four-year South East Wales Schools Capital Working Group framework.

The division also secured major civil engineering projects including, in joint venture, the £235m Crossrail Whitechapel and Liverpool Street Station Tunnels contract.

The firm also announced it had won a place on the £1.2bn four year framework to upgrade Gatwick Airport. Morgan Sindall will compete with nine other contractors for individual schemes.

Chief executive Paul Smith said: “We are delighted to extend our relationship with Gatwick and secure a position on its latest framework.

“Having highlighted the airport sector as one which offers growth potential for our Group, it is pleasing to capitalise on opportunities such as this which help develop our position in the sector.”