Morgan Sindall expects margin of ‘at least’ 2%

Morgan Sindall has revealed that it expects its financial performance to remain on track in 2018, as it continued to trim its order book and focus only on contracts delivering quality of earnings.

In a trading update for the period from 1 July to date, the group said it expected its construction and infrastructure division to achieve margins of “at least” 2% in the second half.

Its fit-out arm was also expected to deliver forecast revenue and profit growth, although as at 30 September this year, its order book was down by £470m (13%) compared to the same period the year before.

Meanwhile, the group’s committed order book as a whole was £3.4bn, down 11% from the year-end position and down 5% from the half year as it focused on “contract selectivity”. Its regeneration & development pipeline of £3.3bn was up 2% from the year end (down 2% from the half year).

Describing its cash position as “strong”, the company revealed it had an average daily net cash position of £75m and from the start of the year to 26 October, the average daily net cash was £98m.

Based upon this and current forecasts to the year end, the average daily net cash for the year is now expected to be in excess of £90m.