Morgan Sindall has upgraded its full-year forecast after a strong start to 2018 across the group.
In a trading update ahead of its AGM today, the London-based contractor said it is on track to deliver results “slightly” ahead of previous forecasts.
News of its positive outlook sent the firm’s share price soaring up 20p, or 1.5 per cent, to 1,324p by mid-morning.
Morgan Sindall, which reported a 46 per cent jump in pre-tax profit in 2017, revealed it has seen further margin growth in its construction and infrastructure division, while its property services division has bounced back into the black after a restructure last year.
The group’s fit-out division has performed strongly and is expected to deliver a better-than-expected full-year result.
Morgan Sindall chief executive John Morgan (pictured, above) said: “We have had a good start to the year and all divisions are continuing to make strategic and operational progress.”
Mr Morgan, who retook control of the group five years ago, admitted to CN last November that its construction margins were “still not special” but that it was losing money on construction two years previous so a 2 per cent margin was “a lot better than breaking even”.
In its housing and regen business, schemes have progressed as planned, the firm said today. Last month, Morgan Sindall bagged a place as a JV partner on a £2bn scheme in Hertfordshire.
The group’s order book as of 31 March was £3.7bn, while the regeneration & development pipeline was £3.2bn, it said.
Mr Morgan added: “Our balance sheet and cash position are both very strong and give us the flexibility to continue focusing on quality of earnings in our construction activities, while investing in our regeneration activities to drive long-term value.
“Our strong order book and customer relationships enable us to look to the future with confidence.”
Morgan Sindall has enjoyed a relatively positive and stable performance in the last two years compared to some of its tier one rivals. Its performance has seen its share price rise from 560p in July 2016 to today’s price of 1,350p.
The firm is due to report its half-year results in August.