Morgan Sindall Chief Executive resigns

Morgan Sindall's Chief Executive, Paul Smith, has resigned following a profits warning.

Morgan Sindall's Chief Executive, Paul Smith, has resigned following a profits warning.

Stepping into the breach, Executive Chairman, John Morgan, has been appointed Chief Executive.

In a trading update the construction company warned that: "Our underlying trading for the current year is expected to be slightly below the board's previous expectations although the group will benefit from the £7m gain made on the sale of our medical property investments this year. This gain will in part offset the £10m restructuring charge that will be incurred this year."

Consensus expectations for the full year ending December 31st had been for pre-tax profits of £42.30m on turnover of £2.09bn.

The company spoke of further market deterioration in the UK construction industry since it announced its interims. It blamed on further reductions in public spending, deferred investment decisions and high levels of competition.

In response the Morgan Sindall is cutting costs, re-organising its network of offices delivering construction and its affordable housing business.

However, these organisational changes will have a one-off impact this year, estimated at £10m (including £3.5m of property related provisions). The company describes this as part of an on-going process that will have delivered £55m of annualised savings over the three-year period to the end of 2012.

One bright spot was that there appears to be good visibility of earnings with the forward order book currently standing at £3.0bn with a further £0.7bn of projects at preferred bidder stage (compared with £3.4bn order book and £0.3bn of projects at preferred bidder stage at the start of 2012).

In addition, in line with the company's strategy to increase its focus on regeneration, the regeneration pipeline has strengthened significantly to £2.1bn with a further £1.1bn of major schemes at preferred bidder stage (compared with a £1.8bn pipeline and £0.6bn of schemes at preferred developer stage at the start of 2012).

CM

Recommended

A new legal headache for Haleon
Stocks and shares

A new legal headache for Haleon

Haleon, GSK’s former consumer-products arm, spun off last month, has made a dismal debut on the stockmarket.
17 Aug 2022
Persimmon yields 12.3%, but can you trust it to deliver?
Share tips

Persimmon yields 12.3%, but can you trust it to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
17 Aug 2022
Cineworld faces a bleak future – investors should stay away
Share tips

Cineworld faces a bleak future – investors should stay away

Weighed down by crippling debts and with consumers tightening their belts, Cineworld's future does not look bright, says Rupert Hargreaves. Investors …
17 Aug 2022
Britain’s ten most-hated shares – w/e 12 August
Stocks and shares

Britain’s ten most-hated shares – w/e 12 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
16 Aug 2022

Most Popular

Don’t listen to the doom-mongers – the future is bright
Economy

Don’t listen to the doom-mongers – the future is bright

With volatile markets, raging inflation and industrial unrest, it may feel like things are bad and likely to get worse. But the end of the world is no…
15 Aug 2022
Investors should get ready for a political revolution
UK Economy

Investors should get ready for a political revolution

Liz Truss will beat Rishi Sunak, cut taxes, and then shake up the Bank of England, says Helen Thomas
15 Aug 2022
How solar panels could lower your energy bill
Energy

How solar panels could lower your energy bill

Solar-panel installation firms are reporting a four-fold increase in orders this year compared with 2021. Ruth Jackson-Kirby explains how solar can he…
14 Aug 2022