02:00 Wed 04 Nov 2020
Morgan Sindall Grp - Trading Update
Morgan Sindall Group plc
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Trading Update
Morgan Sindall Group plc ("the Group") today provides an update on current trading and the outlook for the 2020 financial year.
Group performance and outlook
At the time of the half year results on
The Group notes the Prime Minister's announcement of further national lockdown restrictions across
Based on this and the performance to date, with the Group well into the last quarter of the year, it is now expected that the Group will deliver a full year performance which is slightly above the top end of the previously guided range.
In addition, the Group's cash position has further strengthened and the average daily net cash for the full year is now expected to be in excess of
Current trading by division
In Construction & Infrastructure, the Infrastructure activities have continued to trade strongly, with revenue and margin well ahead of prior year. With the Construction activities also recovering well, it is expected that the overall divisional margin for the year will be in excess of 2%, reflecting the high quality of client relationships, operational delivery and risk management in the division.
In Fit Out, there have been no significant changes to market dynamics or customer behaviour. Although the secured order book at the end of September was 15% lower than at the same time last year, this is more than offset by the value of projects at preferred bidder stage. In addition, the value of tenders due in the final quarter of the year is 18% higher than for the same period last year.
All contracts have now been remobilised in Property Services and a more normal run-rate of activity is expected throughout the fourth quarter.
Partnership Housing has continued to see higher levels of construction activity as well as unit sales and completions since the half year and its operating margin for the full year is expected to be well in excess of 3%. The market opportunity remains significant, with its secured order book to 30 September up 3% from the half year to
Urban Regeneration has performed as expected, with all its development schemes under construction back on site and active again. In relation to progressing its pipeline of new development schemes, the speed of decision-making by potential partners remains cautious, although has improved since the half year.
In Investments, the operational management for the joint venture property partnerships and Later Living business is being transferred across to Urban Regeneration and Partnership Housing during the fourth quarter and a modest level of reorganisation costs will be incurred. These costs will be taken as normal through operating results and consequently the second half is expected to show a broadly similar loss to that which was reported for the first half.
Group secured workload
The total secured workload for the Group as at
This comprised the construction secured order book of
Repayment of furlough receipts
At the time of the half year results, the Group announced its intention to voluntarily repay the claims which it had made under the Government's CJRS furlough scheme, and that this would be taken through Central costs.
The total amount of cash received under the scheme of
Balance sheet and liquidity
The Group remains in a very strong financial position.
The average daily net cash from 1 July to 31 October was
For the period from 1 January through to 31 October, the average daily net cash was
Based upon this and current forecasts to the year end, the average daily net cash for the full year is now expected to be in excess of
During October, the Group also secured a new
Interim Dividend
At the time of the half year results, the Board concluded that there remained sufficient market uncertainty so as not to declare an interim dividend at that time, however it also committed to actively consider the resumption of dividend payments when there was further clarity over the economic outlook and business interruption risks.
Based upon its current assessment of the performance of the business, the outlook for the year and the strong cash position, the Board has declared an interim dividend of 21.0p per share, in line with 2019's interim dividend.
This will be paid on
"Following the disruption earlier in the year, all of the Group's activities are now fully operational again and delivering high levels of productivity. We welcome the Prime Minister's clear statement that construction activity should continue through the new lockdown restrictions in
Our high-quality secured workload gives us good visibility for the rest of the year and as such, we now expect to deliver a full year performance slightly above the top end of our previous expectations.
Our strong cash generation, position and balance sheet remain key differentiators. These, together with the improved outlook for the year, have enabled us to repay furlough monies and resume dividend payments as declared today.
Despite the uncertainty that the pandemic brings, we have a sound platform for future growth with the Group geared towards future demand for affordable housing, urban regeneration and infrastructure and construction investment."
ENDS
ENQUIRIES:
Morgan Sindall Group plc Tel: 020 7307 9200
Instinctif Partners Tel: 020 7457 2005
Matthew Smallwood
Rosie Driscoll
Morgan Sindall Group
Morgan Sindall Group plc is a leading UK construction and regeneration group with revenue of c£3bn, employing around 6,200 employees and operating in the public, regulated and private sectors. It operates through six divisions of Construction & Infrastructure, Fit Out, Property Services, Partnership Housing, Urban Regeneration and Investments.
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