Morgan Sindall’s revenue may have remained largely flat for the first half of 2019, but with a 0.4 percentage point improvement in the margin to 2.6 per cent, adjusted operating profit rose by 18 per cent to £37.5m. Based on first-half performance and visibility for the rest of the year, chief executive John Morgan is confident full-year results will be slightly ahead of previous expectations.
Accounting for 37 per cent of the group total, operating profit in construction and infrastructure increased by 23 per cent to £13.9m on 3 per cent sales growth. More selective bidding saw construction revenue fall by 7 per cent but a 0.3 percentage point margin jump boosted operating profit by 7 per cent. The group is targeting a 2.5 per cent margin in the second half of the year and beyond.
Meanwhile, the expected decline in office space fit-outs saw operating profit decline by 13 per cent to £16.4m, while the margin halved to 4 per cent. Despite tighter market conditions, the group anticipates profit will reach the higher end of the targeted £30m-£35m range at the year end.
Numis forecasts adjusted pre-tax profit of £85m and EPS of 156p for the full year, rising to £92m and 169p in 2020.
| MORGAN SINDALL (MGNS) | ||||
| ORD PRICE: | 1,140p | MARKET VALUE: | £519m | |
| TOUCH: | 1,136-1,146p | 12-MONTH HIGH: | 1,536p | LOW: 1,000p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 792p* | NET CASH: | £114m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 1.42 | 29.9 | 55.2 | 19.0 |
| 2019 | 1.42 | 35.5 | 62.9 | 21.0 |
| % change | -0.1 | +19 | +14 | +11 |
| Ex-div: | 10 Oct | |||
| Payment: | 28 Oct | |||
| *Includes intangible assets of £217m, or 476p a share | ||||
