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Morgan Sindall expects to report a record year of profit in 2021, shrugging off the impact of covid-19 which sent last year鈥檚 pre-tax profit down by one third.

Chief executive John Morgan called last year an 鈥渁nomaly鈥� as the pandemic ushered the firm to a 31% fall in pre-tax profit to 拢61m.

But less than two months into 2021, Morgan said: 鈥淚t鈥檚 been a very good start to the year. For 2021, we expect [profit] to be back above the 2019 figure which was a record in itself.鈥�

In 2019, the firm posted a pre-tax profit of 拢88.6m with analysts forecasting profit this year to be marginally ahead of that number.

Morgan said the fall in profit, its first for five years, was all down to the impact of covid which saw the firm having to close sites, bring in new safety measures and procedures and cope with falling productivity.

鈥淚t鈥檚 quite difficult to do well when sites are closed,鈥� Morgan said. 鈥淚t was really tough when sites were closed.鈥� But the firm managed to keep revenue broadly similar to 2019鈥檚 figure, only slipping 1% to 拢3.03bn.

Morgan said the impact of covid was 鈥渟horter and sharper鈥� than the financial crash more than a decade ago but he added: 鈥淚t all depends on what the recession will be like this year.鈥� But he said the pandemic will make the industry more efficient, such as increased use of MMC, and productivity will improve as a result.

He added the firm had not run into any disputes with its supply chain or clients because of covid and said: 鈥淚t鈥檚 fundamental to keep doing the right thing in the long-term. I don鈥檛 see a long tail of disputes coming out of covid. This is the fifth year in a row we鈥檝e had clean accounts, no exceptionals. We don鈥檛 have disputes.鈥�

The firm improved its balance sheet last year with year-end net cash hitting 拢333m, up by 拢140m on the previous year-end, with average daily net cash jumping to 拢181m from 拢109m.

It said it has paid back all the 拢9.5m in furlough money it received from government鈥檚 Coronavirus Job Retention Scheme while it paid back all its deferred VAT and PAYE payments, around 拢20m, by the year-end as well.

Morgan, who has previously said paying back furlough money is the right thing to do, said it would be paying out a 61p per share dividend for 2020 鈥� a record annual payment 鈥� although the firm cancelled its 2019 final dividend because of the pandemic.

The firm said it had increased the operating margin target of its infrastructure business, which includes its roads, rail and nuclear work, from 3% to 3.5%.

Its biggest business remains construction and infrastructure where revenue was up 10% to 拢1.6bn and operating profit up 11% to 拢35.7m.

Its next biggest division is fit-out where revenue slipped 17% to 拢700m and operating profit was down 13% to 拢32.1m 鈥� but operating margins were up to 4.6% from 4.4% in 2019.

Morgan added: 鈥淔it-out is holding up very well indeed. Our average job is 拢2m so all we need is our clients to say they want to change something.鈥�

The firm鈥檚 partnership housing business, which Morgan expects to be its biggest profit earner in five years鈥� time, saw revenue fall 14% to 拢441m and operating profit down 12% to 拢16.1m. The firm said at the peak of the first lockdown in the second quarter of last year, 93% of its sites were shut.