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Strong regions help to gloss over Morgan Sindall's slide

MORGAN Sindall has reported a slight dip in first half pre-tax profits but has seen an increased dividend and a strong underlying performance in its regional contracting and fit out business.

The company pointed to the weighting of this year's regional construction contracts towards the second half and the timing of property profits for a slip in pretax profits to £5.8 million for the half ending June, down from £6.3 million last time. Group turnover rose by 31 per cent to £289 million.

But operating profits from continuing operations rose to £5.9 million from £5.7 million last time and chairman John Morgan said the company faced a strong position for the second half.

He is also keen on more acquisitions and said that the pressure for consolidation in the construction sector would create opportunities for growth.

Operating profits at the group's fit out business rose by 13 per cent to £4.24 million as its Morgan Lovell and Overbury subsidiaries grew. Fit-out turnover rose by 26 per cent to £97 million. .

Meanwhile, regional construction profits rose by 48 per cent to £1.7 million on a turnover of £143 million. An improved result is forecast for the second half and the firm is on target to reach margins of 2 per cent. All seven of the group's regional contracting brands are now profitable.

The group's affordable housing business produced a profit of £1.1 million on a turnover of £50 million and the business is set to benefit from a 12 per cent rise in real spending on public housing following the government review.