Morgan Sindall has delivered another record first half, with adjusted profit before tax up 21% to £116.1m, prompting the group to raise medium-term targets for its two standout divisions.
Revenue rose 8% to £2.56bn in the six months to 30 June, with the operating margin expanding 50 basis points to 4.4%.
Adjusted earnings per share climbed 22% to 186.1p, and the interim dividend has been increased 10% to 55p, reflecting the board’s confidence in the group’s prospects.
“We delivered another record half year results for the Group, achieving significant growth in adjusted profit before tax, up 21% to £116m from the prior period,” said John Morgan, Group Chief Executive Officer.
“Our performance continues to reinforce our track record of delivering strong revenue and growth in profits leading to robust cash generation, enabling continued investment in our Partnership businesses while also supporting strong dividend growth.”
Fit Out was once again the engine, growing revenue and operating profit by 19% to £996m and £69.1m respectively at a market-leading 6.9% margin. Its medium-term target has been raised to average annual operating profit of £100m-£130m, from £80m-£100m, with this year’s profits now expected to come in slightly ahead of the top of that new range.
Construction delivered a 47% jump in operating profit to £24.4m on revenue up 18%, and its margin target has been lifted to 3.5%-4.0% from 3.0%-3.5%.
The Partnerships business faced a tougher backdrop. Partnership Housing held operating profit flat at £13.2m despite revenue falling 14%, with subdued consumer confidence, particularly in London, slowing open market sales; full-year profits are now expected to be slightly below last year.
Mixed Use Partnerships recorded a small loss as it prioritised getting projects on site, with five started in the half and eight more planned. Infrastructure profits were marginally behind at £18.3m, with the full-year margin expected at the top of its target range.
The secured order book stood at £12.2bn, with a further £7.3bn at preferred bidder stage taking the total workload to £19.5bn.