Morgan Sindall Group revenue for the year to 31st December 2023 was up 14% to 拢4,118m (2022: 拢3,612m).
Profit before tax was up 69% to 拢143.9m (2022: 拢85.3m)
An exceptional Building Safety credit of 拢2.2m was recognised in the year, compared to a charge of 拢48.9m in 2022. The credit arose as a result of a better estimate of expected costs and recoveries, the board said. This movement was the main driver of the 69% increase in pre-tax profit. However, underlying operating profit was still up by 2% at 拢141.3m.
End of year net cash was 拢461m (2022: 拢355m) while average daily net cash was 拢282m (2022: 拢256m), earning a tidy 拢10m in bank interest .
Morgan Sindall鈥檚 fit out division, Overbury, grew revenue by 14% to 拢1,105m (2022: 拢967m), with operating profit up 38% to 拢71.8m (2022: 拢52.2m) 聽at an operating margin of 6.5% (2022: 5.4%)
The 萝莉原创 division grew revenue by 18% to 拢967m (2022: 拢820m) at an operating margin of 2.7%. (2022: 2.8%).聽 Operating profit was up 15% to 拢25.9m.
The Infrastructure business saw revenue up 15% to 拢887m (2022: 拢768m), with operating profit up 31% to 拢38.5m at an operating margin of 4.3% (2022: 3.8%).
The Property Services business suffered an operating loss of 拢16.8m (2022: 拢4.3m profit).
Partnership Housing grew revenue by 20% to 拢838m (2022: 拢696m) but operating profit was down 18% at 拢30.5m (2022: 拢37.4m).
Chief executive John Morgan said in the annual report: 鈥淒espite facing market headwinds in the year and the disappointing losses in Property Services, the diversified nature of our operations and capabilities has allowed us to continue to make significant strategic and operational progress. In addition, our focus on positive cash flow together with our strong balance sheet has positioned us well to benefit over the long term from the opportunities available in our markets.
鈥淭he challenging general market conditions coming into the year continued to ease throughout, with inflation falling in most areas. Although still a headwind for the group, the general trading environment became more manageable and predictable as the year progressed.
鈥淒uring the year, however, the ongoing stability of the supply chain has become more uncertain with liquidity issues increasingly common, requiring additional vigilance both pre-construction and during the delivery of projects. The risk is mitigated to some extent by the diligence taken before project commencement and the fact that no division is overly reliant on any one supplier.
鈥淚n 萝莉原创 and Infrastructure, where projects are currently underway, most include appropriate inflationary protection within the overall contract pricing and this is not seen as a significant risk. Where projects are being priced for future delivery, inflation continues to place some project budgets under pressure, which in turn has led to some delays in decision-making and project commencement. However, the impact of this has not been material and in many cases, any client budget constraints are being addressed by adjustments to project scopes, thereby allowing projects to proceed.
鈥淭he market for Fit Out's services has continued to be very strong, with a number of positive structural changes in the market. The main drivers of this include lease-related events, the requirement for greater energy efficiency from offices, the move towards more flexible and collaborative workspaces, the use of office space as a tool for enhancing staff retention and brand image, and office relocations to the regions with clients requiring increasingly complex projects.
鈥淚n Property Services, housing maintenance and the general state of repair of housing stocks are increasingly the focus for local authorities and housing associations. During the year, the business has been severely impacted by general cost and labour inflation which has impacted the profitability of its contracts.鈥�
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