Analysts expecting profit to be around £127m this year
Morgan Sindall said trading is continuing as normal despite ongoing inflation and supply chain issues, with the firm confirming its partnership housing business has signed the government’s pledge to fix cladding on residential buildings of 11m and above.
The firm, which last year revised its profit forecast upwards four times, said trading was in line with expectations despite the “significant challenge” of rising costs.
In a trading update for the three months to March, the firm said: “An already difficult trading environment [is] being exacerbated by the conflict in Ukraine. Notwithstanding this, however, the impact continues to be minimised on most projects through focused sourcing through the supply chain and ongoing operational efficiency.”
At the time of its annual results in February, announced on the day Russia invaded Ukraine, chief executive John Morgan said the firm was expecting 2022’s figures to be ahead of previous expectations with analysts forecasting pre-tax profit to be around £127m this year and close to £133m next. Pre-tax profit last year was £126m on revenue of £3.2bn.
In this morning’s update, the firm said: “On the basis of the performance to date and the current visibility of future workload for delivery in the remainder of the year, the Group is confident of delivering a full year performance which is in line with its previous expectations.”
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The firm said its construction and infrastructure business was on course to hit revised margin targets of between 3.5% and 4% in the medium term while its booming fit-out arm “remains very strong”. The firm’s property services business had seen a slower start to the year because of lower demand for maintenance work – although this is expected to pick up throughout the rest of 2022.
Partnership housing was seeing “good levels of demand” with the firm saying the cost of signing the cladding pledge “not expected to be material to the Group and [which] will be charged through trading results in the ordinary course”.
Group workload was up 6% to £8.6bn for the first three months with average daily net cash from 1 January to 30 April standing at £279m, down slightly on the £290m for the same period last year.
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