Morgan Sindall stays upbeat about year-end numbers

Morgan Sindall said trading is continuing as normal with the firm saying it is on track to hit expectations with analysts previously forecasting pre-tax profit to be around £134m this year.

At its annual results in February, announced on the day Russia invaded Ukraine, the firm said pre-tax profit last year was £126m on revenue of £3.2bn.

In a trading update this morning, the firm said “continued inflationary headwinds have provided for a more challenging economic backdrop” since its interim results announcement in August.

But it added: “Trading across the Group has been robust and with its high-quality secured workload giving good forward visibility, the Group is on track to deliver a full year performance in line with its expectations.”

Analysts are expecting pre-tax profit this year to be between £132m and £134m and turnover to be around £3.4bn.

The firm said that margins at its construction and infrastructure businesses would be in their target ranges of 2.5% to 3% and 3.5% to 4% respectively.

Fit out was in line for a “very strong” year, it added, but partnership housing had seen sales slip in recent weeks following turmoil caused by the mini-budget in September, since abandoned by new prime minister Rishi Sunak. It said that the costs of carrying out repairs to fix historic cladding defects remained at between £40m and £50m.

Average daily net cash between 1 January and 28 October was £260m with the firm adding that average daily net cash for the full year is expected to be around £250m.

The firm is expected to release its annual results next February.