Morgan Sindall: FTSE 250 construction group continues run of growth

Construction and regeneration group Morgan Sindall has reported yet another half of double-digit revenue and profit growth.

The FTSE 250 constituent, which is headquartered in London and helped expand Whitechapel station for Crossrail in 2021, hailed a “record” performance in the six months to 30 June. Revenue jumped 14 per cent from £1.9bn to £2.2bn.

Profit before tax rose by high double-digits year-on-year, up 17 per cent to £70.1m, while operating profit rose 11 per cent to £65m.

Adjusted earnings per share, which increased from 98.9p in the first half of 2023, rose to 112.5p this year; a rise of around 14 per cent. Off the back of the results, the company hiked its interim dividend to 41.5p.

It disclosed an order book of £8.7bn, slightly down on the £8.9bn in 2023.

Morgan Sindall ‘s chief executive and co-founder, John Morgan, put the firm’s success, which has bucked the downturn felt by much of its sector, down to basics, telling City A.M.: “There’s no magic science… Having a very strong balance sheet and a lot of cash gives you many good options compared to if you don’t have a good balance sheet.

“Fit out [work to make an interior space liveable] has driven things and that’s been a strong market, which we’re the market leader in…

“[It] may reduce a bit because its been such a strong market, but over all the markets we are in are flat or going up-ish.”

Morgan added that the firm remained “well-positioned” to support the new Labour government’s recently announced affordable home and social infrastructure plans. These plans are expected to usher in a ramping up of activity for housebuilders and construction specialists like Morgan Sindall.

“Broadly speaking we are in a really good place for the sort of things that [Labour is] talking about,” Morgan said. “But in infrastructure they could well cancel a few things and there’s a limit to how much money [Reeves] has to spend.

“Governments find it hard to turn taps on and off very quickly, so I think the benefit isn’t something we’re going to feel in the immediate short term, but I think we are well geared in the medium term to benefit from the change.”

The bumper results continue a remarkable run from the London-listed firm, which, in its full year results published in February, bucked an industry-wide malaise to post more double-digit growth.

Morgan Sindall said its balance sheet grew from £263m to £351m, with more average daily net cash than last year.