Regeneration and construction firm Morgan Sindall has reduced its dependence on pubic sector projects and increased revenues as its recovery from big share price falls last summer continues.
The firm grew revenues to £2.227bn in 2011, a 6% gain on 2010. However, in what are described as "challenging" market conditions, the group saw pre-tax profits drop 2% to £40m from £40.7m in 2010.
The group ended the year with £109m cash in the bank, down 27% on the previous year while adjusted earnings per share fell 11% to 82.5p.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In the Construction and Infrastructure division competition forced prices down, reducing margin by 50 basis points to 1.7%. The order book stands at £1.6bn, down significantly from the £2bn seen at the end of 2010.
The Fit Out division saw an even bigger fall in margin from 3.6% to 2.8% and Morgan Sindall warns the "recovery is expected to be slower and later than expected".
Affordable Housing maintained margin at 4%, only slightly down on the 4.2% achieved in 2010.
John Morgan, the Executive Chairman of Morgan Sindall emphasised his firm had "delivered in line with expectations...despite challenging markets".
A crucial metric for the group is its exposure to public sector work, which fell from 70% in 2009 to 50% in 2011. Given the expected squeeze on public projects this balance of work is likely to help the firm through 2012.
Investors seemed content with today's release, by 10:00, Morgan Sindall shares had gained 1.1%. Over the last six months the stock has gained 16%.
BS
-
Reeves warned against property tax shake-up – 3 ways it could backfire on first-time buyersRachel Reeves reportedly has her eye on high-end property taxes in the upcoming Budget, but there are concerns a shake-up could unintentionally hamper those trying to get on the housing ladder
-
Average Brits want to retire five years before they can – who has the widest retirement gap?Brits are expecting to work for longer than ever but there are big disparities in the number of extra working years predicted. A small tweak could help close the gap
