Morgan Sindall builds on satisfactory progress
CONSTRUCTION group Morgan Sindall has said it has made a satisfactory start to the year and is on track to meet its expectations for this year.
The group said despite the problems besetting the construction sector it had seen no significant change in market conditions since the start of the year, which it said remained competitive across its different markets.
“Our strategy is to further develop our construction market position and to invest in mixed-used urban and mixed-tenure housing regeneration whilst maintaining a strong balance sheet,” it said in a statement ahead of its AGM.
It said due to the competitiveness of the Construction and Infrastructure division it was looking to rein in costs to ensure margins were preserved. Efficiency improvements are also being factored into the group’s strategy.
The division operates across a broad spread of sectors and is targeting growth in the infrastructure markets through road, rail, aviation and energy distribution projects.
It said it had secured several notable new projects including a £28m new energy scheme for Yorkshire Water in joint venture, a five-year extension to its substation contract with National Grid, and was appointed preferred partner to deliver £200m of public sector infrastructure projects in West Scotland.
Within the Fit Out division it said there had been no significant changes in market conditions since the start of the year and it expected the recovery of the London fit out market to be slow.
Affordable Housing saw a modest improvement in market conditions. However, it said it remained cautious on the outlook for the sector, particularly due to the continuing challenges faced by first-time buyers looking to secure mortgage finance.
The division has secured several major new schemes including the £28m estates regeneration project with Southampton City Council. It was also appointed as one of a number of companies to a £300m heating maintenance framework for three large housing consortia, and won a £12m home improvement scheme in Northamptonshire.
It said its land-based regeneration model was becoming increasingly important as land released for development was driving what little economic renewal there was in the absence of public grants.
“Since the start of the year, Urban Regeneration has progressed planning and developments across a number of projects in its portfolio and it is increasing its investment in working capital to drive medium-term growth,” it said.
It has begun the process of recycling its invested capital with the sale of its interest in the Dorset Fire and Rescue PFI. In addition, it recently signed contracts for both the £38m Towcester Regeneration project as well as the Western hub infrastructure programme – part of the Wellspring consortium for the Scottish Futures Trust.
“Overall, the division remains focused on pursuing projects that will secure construction opportunities for the rest of the group,” it said.
The group’s forward order book currently stands at £3.2bn and in addition its regeneration pipeline of £1.8bn is unchanged since the start of the year.
Morgan Sindall said its financial position remained sound and there had been no significant changes to the group’s financial position since the publication of its Annual Report.
“In summary, we have made a solid start to 2012. With our focus on investing in regeneration and growing our construction market position, we remain well placed to respond to growth opportunities and to succeed in the current competitive market,” it added.
