Construction margin hits 3% as group daily cash soars to £374m
Morgan Sindall’s fit-out arm Overbury delivered a another stellar performance last year contributing more than half of the construction group’s profits.
A strong daily net cash position of £374m (2023:£282m) helped Morgan Sindall to remain choosy about the work it took on helping the mainstream construction arm to achieve a 3% operating margin, a medium-term target for the business.
Infrastructure and mixed-use partnerships divisions also put in strong performance leading to an uplift in targets for the year ahead.
The only blemish continued to be the property services operation which recorded operating losses of £17.8m, impacted by exit costs from an early release from a small number of contracts and a review of contract assets. The business is now positioned to return to profit in 2025.
Across the Morgan Sindall group revenue rose 10% to £4.55bn, generating a 19% uplift in pre-tax profit to a record £172m.
Overbury alone contributed an operating profit of £99m, off revenue up 18% to £1.3bn.
The group’s order book also continued to swell increasing by 28% to £11.4bn. This was driven by a strong uptick in Mixed Used Partnership orders for housing.
Chief Executive, John Morgan said: “2024 was another record year for the group.
“Throughout the year we have continued to make significant strategic and operational progress and remain well positioned to support the Government’s affordable home and social infrastructure plans over the medium-term, a result of which is that we have upgraded medium-term targets for four out of six of the group’s divisions.
He added: “Our balance sheet, supported by a substantial average daily cash position, has allowed us to focus on making the right decisions to drive long-term sustainable growth while also supporting the returns to shareholders in the year.
“Looking ahead, while there is continued uncertainty in the wider macroeconomy, we remain positive for the year ahead. Together with our high-quality and growing order book spread across a wide number of sectors, we are well-positioned for the future and on track to deliver an outcome for 2025 which is in line with our current expectations.”
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