Morgan Sindall on track for record profit

Morgan Sindall has said it remains on track to achieve record profit in 2008.

In a trading update this morning, the UK-based contractor said: “The forward order book remains strong at £3.8bn and in addition to this, Urban Regeneration's development pipeline has increased to £1.3bn.”

One consensus forecast for the year to 31 December 2008 is pre-tax profit of £69m on turnover of £2.4bn.

The group said that its Overbury fit-out division had performed strongly in the second half of 2008 but warned that figures will fall in 2009 as the effects of the downturn kick in.

Its construction arm is trading in line with expectations, and the group pointed to the fact that over 70% of its workload comes from the public sector.

Morgan Sindall said: “Our strength in the education and healthcare sectors in particular should help us to benefit from government plans to bring forward public spending in these areas.”

It added: “Infrastructure services continues to benefit from the buoyant infrastructure market. It has continued to strengthen its market position by further developing its market leading positions in tunnelling, transport, water and utilities. The division's expertise in tunnelling means it is well placed as a number of major tunnelling projects are procured over the next 12 months.”

It said its performance in 2009 would be underpinned by its broad spread of activity, and an emphasis on cash management, cost reduction and supply chain improvements.

The statement did not say whether the cost reduction plan would involve job cuts.