Morgan Sindall swings to loss on contract woes
Legacy contracts forced construction firm Morgan Sindall into the red for the first half of this year.
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The listed company posted a 6% drop in first half pre-tax profit to £14.2m.
Shares in the company fell on the news, dropping by 3.28% to 783.22p at 0949 BST.
The construction firm took a £39.4m hit on old contracts which it entered into during the economic downturn. It had earlier set aside £35m to cover losses on the two contracts.
First half earnings per share were also down by 14% at 24.5p per share from 28.6p.
Group revenue was up by 15% to £1,152m from £998m, and full year expectations remained unchanged. The board maintained a 12p per share interim dividend.
Morgan Sindall noted a strong performance from its Fit Out division which increased operating profit by 89% to £10.4m compared with £5.5m the year prior.
Chief executive John Morgan said the Fit Out division was expected to produce a strong performance in the second half.
"Construction & Infrastructure continues to be impacted by the poor performance of its older and lower margin construction contracts in London and the South and, whilst these are working through to completion, this is happening at a slower rate than previously anticipated which will hold back the divisional performance in the second half of the year."