This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (MAR) and is disclosed in accordance with the Group’s obligations under Article 17 of MAR. The person responsible for making this announcement is Kelly Gangotra, Chief Financial and Commercial Officer.
MORGAN SINDALL GROUP PLC
Trading and Outlook for 2026
Full year expected to be slightly ahead of previous expectations, £75m share buyback announced
Morgan Sindall Group plc (‘the Group’), the Partnerships, Fit Out and Construction Services Group, today provides an update on trading and the outlook for the 2026 financial year, as well as announcing a £75m share buyback.
Trading Update and Outlook
Further to the Group’s announcement of its half year results on 29th July 2026, strong trading momentum has continued and, together with strong visibility of secured orders through to the end of the year, the Group now anticipates that its full year results for 2026 will be slightly ahead of its previous expectations.
Fit Out has continued to deliver strong profits and, supported by its visible order book, is well positioned to deliver a full-year result slightly ahead of the prior year (FY 2025: £139.9m).
The Construction division has continued to perform strongly and is on track to deliver materially higher, double-digit profit growth, significantly ahead of expectations (FY 2025: £39m1). Operating margins for the full-year are now expected to be at the upper end of the 3.5%-4.0% medium-term target range, reflecting the division's disciplined approach to bidding, delivery and risk management. The division expects to make good progress towards revenues of £1.5bn (FY 2025: £1,371m1). During the period, the business secured positions on all five lots of Pagabo's £5bn Major Works Framework, one of only two contractors to do so.
Infrastructure has performed well in the year to date and is also expected to deliver double-digit profit growth (FY 2025: £37.2m), while advancing its progress on planning and design activities across major frameworks, with two Energy projects supporting the Great Grid Partnership now in construction phase. Previous guidance remains unchanged. The division continues to expect revenues to progress towards c.£1bn (FY 2025: £935m) with an operating margin at top end of the 3.75-4.25% medium-term target range.
Partnership Housing has continued to strengthen its resilience, through self-help and capital efficiency measures for the forthcoming years. While profits are now expected to be below previous expectations, reflecting prevailing market conditions of low consumer sentiment and affordability pressures, the division is well placed to benefit from the Government's Your First Home scheme. This is expected to support more first-time buyer demand across all of the Group’s key geographies from next year and into 2028. Average capital employed for the full year is now expected to be between c.£550m and £580m (from £500-580m previously).
Mixed Use Partnerships continued to prioritise project starts, with seven projects commenced on site in the first nine months and a further three planned by year-end. As these project starts are largely second half weighted, the trading performance for the year will reflect their associated upfront investment costs, with the full year expected to show a loss similar to prior year levels (FY 2025: (£5.3m)). The average capital employed for the full year is expected to remain in line with previous expectations (c.£135m to £165m).
Despite the prevailing market conditions, the strength and breadth of the Group’s diverse operations, the visibility provided by its high-quality order book for the forthcoming year, and alongside the self-help measures already taken accompanied with the capital allocation discipline in place, the Group remains confident that the outlook for 2027 will be in line with current expectations.
1 From 1 January 2026, the Property Services division has been fully integrated into the Construction division, with prior year comparatives restated to reflect the new segment structure.
Capital Allocation and Share Buyback Programme
The Group’s overarching principle governing capital allocation is a commitment to maintain a strong balance sheet and to hold a significant net cash balance at all times. This is driven by a clear focus to provide a stable and firm foundation for the Group to make sound decisions for its long-term development, thereby enhancing its competitive advantage and underpinning its ability to win future work.
For the period between 1 January to 4 November 2026, daily average net cash was £400m (of which £51m relates to amounts held in jointly controlled operations or held for future payment to designated suppliers), compared to £362m for the same period in the prior year. The low point in the period was £273m.
The Board uses the lowest net cash position on any one day in the year as the key reference point from which it considers the application of its capital allocation hierarch, namely:
- Maintaining a strong balance sheet;
- Maximising investment in Partnership activities to drive sustainable growth;
- Ordinary returns to shareholders;
- Investment by acquisition to accelerate sustainable growth; and
- Special returns to shareholders.
The Board remains committed to allocating capital with discipline to the opportunities offering the highest risk-adjusted returns. Following a period of substantial investment in both Partnership businesses, the Group anticipates a reduced capital requirement going forward.
Given the combination of the Group’s strong underlying cash flow generation and strong balance sheet position, the Board anticipates the Group generating surplus cash flow in the near-term, after taking into account ongoing investment in the business, net cash on the lowest day of the year after consideration of the Group’s minimum cash requirements, and a progressive ordinary dividend. The Board will continue to monitor and assess the Group’s surplus cash flow position at regular intervals looking ahead.
Accordingly, and consistent with the capital allocation policy set out above, the Board is pleased to announce a return of surplus capital to shareholders of up to £75 million to be implemented through a share buyback programme. The buyback will commence today and is expected to be completed toward the end of 2027. The Board will announce the full terms of the buyback in a separate announcement today.
Following the announcement of the share buyback, the average daily net cash for the full year is now expected to be in a range between £390m - £400m.
Enquiries: Morgan Sindall Group John Morgan Kelly Gangotra Brunswick Jonathan Glass Tom Pigott | Tel: 020 7307 9200 Tel: 020 7404 5959 |
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