Morgan Sindall has reported a 44% leap in pre-tax profits in the first half of 2017 as it doubled its construction margin.
For the six months to 30th June 2017 Morgan Sindall made pre-tax profit of £23.1m (2016 H1: £15.4m) on revenue up 14% to £1,307m (2016 H1: £1,148m).
The company’s Construction & Infrastructure division has improved its profit margin to 1.1% this year from just 0.5% last year by better selection of work to take on.
This resulted in operating profit of £7.6m for Construction & Infrastructure, up 138%, on revenue of £694m, up 13%. Fit Out has been doing particularly well, with revenue of £339m up 15% and operating margin hitting 4.3% (2016 H1: 3.9%). Two-thirds of the company’s fit-out work is in London.
Chief Executive John Morgan said: “This is a strong set of results, driven by another period of margin and profit growth in Fit Out and further progress on margin recovery in Construction & Infrastructure. Reflecting our overall profit performance, our strong balance sheet and cash performance, and our confidence in the quality of our business, we are increasing the interim dividend by 23% to 16p per share.
“With the current trading patterns in Fit Out and the forward visibility provided by the size and quality of its order book, together with further margin improvement in Construction & Infrastructure and an increase in scheme completions in Partnership Housing and Urban Regeneration, we are confident of another strong performance by the group in the second half.”
Headline results by business segment
|Revenue||Operating Profit/(Loss)||Operating Margin|
|Construction & Infrastructure||694||+13%||7.6||+138%||1.1%||+60bps|