Business
Pre-Close Trading Update
Pre-Close Trading Update.
About this update from Morgan Sindall Group Plc
[{"type":"text","content":"\n Morgan Sindall PLC\n19 December 2006\n\nMorgan Sindall plc\n\nPre-close Trading Update\n\nThe Board of Morgan Sindall plc today announces a trading update, prior to its\nclose period, for the year to 31 December 2006. The Group's preliminary results\nwill be announced in February 2007.\n\nTrading\n\nOverall the Group has made further progress during the year and is trading in\nline with expectations and again seeing year on year growth.\n\nFit Out's market has remained buoyant and the division has traded strongly\nthroughout the current period. In November the division secured its biggest\ncontract to date with Deloitte, which is in line with its stated intention of\ndelivering larger scale projects. Overall the forward order book has been\nmaintained at a level similar to June 2006 and this order book supports our view\nthat the current market strength will continue well into 2007.\n\nConstruction continues to focus on its target sectors of health, education,\nlight industrial and commercial. Revenue and profit for 2006 are expected to\nincrease modestly on 2005 and the forward order book has been broadly\nmaintained.\n\nInfrastructure Services has been very successful in securing £800m of new\ncontracts across the infrastructure, utilities, tunnelling and rail sectors,\nwhich is expected to lead to increased revenue and profit in 2007. In\nparticular, the new rail business is performing well and is expected to\ncontribute significantly to this growth. However, as previously announced, the\ncombination of the reorganisation of the division in the first half of the year\nand the commencement of new contracts will impact margins in 2006.\n\nAffordable Housing's margin continues to grow strongly. Current workload is\nbalanced between new build and refurbishment activities, with the Decent Homes\nframeworks continuing to be an important part of the division's workload.\nHowever, we expect future growth to be increasingly driven by larger, more\ncomplex mixed tenure schemes. The forward order book has been maintained and\nthere are also a number of larger scale opportunities in the pipeline.\n\nOverall the forward order book stands at £3.4bn, an increase of 22% since the\nbeginning of the year. This reflects, in particular, the strong market\nconditions in Fit Out and Infrastructure Services. Average cash balances will\nbe lowe...