Morgan Sindall announces £2.1bn turnover for 2008

Morgan Sindall kicked off the results season by breaking the £2bn turnover barrier and beating City expectations with record full-year figures to the year ended 31 December 2007.

It posted pre-tax profit of £57.6m (2006: £47.6m) on turnover of £2.1bn (£1.5bn).

John Morgan, executive chairman, said: “Our business strategy has proved highly successful in helping us achieve record preliminary results, with all operating divisions delivering impressive profit growth.”

Morgan said half of the turnover and profit growth came from the acquisition of Amec’s developments and project services divisions for £26m last July and the other half was achieved through organic growth.

He said: “The businesses we acquired last year have been substantially integrated and have extended our capabilities in construction, infrastructure services and urban regeneration.”

But he acknowledged some areas would suffer: “We have a housebuilding exposure with Lovell and open market sales are slowing down, no doubt.”

Turnover at the affordable housing division fell from £404m in 2006 to £398m, though margins rose to 6.4% and the order book was up from £1.4bn to £1.5bn.

The fit-out division performed strongly. Turnover rose from £426m to £492m and operating profit increased from £22.6m last year to £25.9m. The group said it was “holding up amid economic uncertainty” but Alastair Stewart, analyst at Dresdner Kleinwort, said a downturn in office building would hit Morgan Sindall’s fit-out volumes in 2009.

The group had a forward order book of £4.3bn at the start of 2008, up from £3.3bn last year.