Morgan Sindall’s (MGNS) half-year results were pretty much in line with the upbeat July trading statement, with adjusted operating profit up 37 per cent to £24.9m and strong cash generation.
The outstanding performance came from fit out, but all key divisions showed decent growth. Adjusted operating profit at fit out was up 27 per cent at £14.6m, while operating margins moved up from 3.9 per cent to 4.3 per cent. Around two-thirds of revenue related to the fit out of existing office space, with London accounting for two-thirds of all revenue. Crucially, the forward order book rose to a record £568m, up 22 per cent from the December 2016 year-end.
The largest division covers construction and infrastructure, and its operating profit jumped from £3.2m to £7.6m. Chief executive John Morgan conceded that margins were not best in class at 1.1 per cent, but this was a big improvement from 0.5 per cent a year earlier, and well on the way to achieving a targeted 2 per cent in construction and 2.5 per cent in infrastructure.
In partnership housing – which includes mixed tenure housing, maintenance and refurbishment – profit rose by a fifth to £5.5m, and this division is expected to attract a lion’s share of the investment budget, as demand for affordable housing continues to grow.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to December 2017 of £60m and EPS of 105.4p (from £45.3m and 84.7p in 2016).
| MORGAN SINDALL (MGNS) | ||||
| ORD PRICE: | 1,425p | MARKET VALUE: | £637m | |
| TOUCH: | 1,421-1,443p | 12-MONTH HIGH: | 1,500p | LOW: 638p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 642p* | NET CASH: | £97m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.15 | 15.4 | 28.5 | 13 |
| 2017 | 1.31 | 23.1 | 42.5 | 16 |
| % change | +14 | +50 | +49 | +23 |
| Ex-div: | 12 Oct | |||
| Payment: | 30 Oct | |||
| *Includes intangible assets of £216m, or 484p a share | ||||
