黑洞社区

Morgan Sindall is expected to post a pre-tax profit this year in excess of 拢100m for the first time after the firm said a trading boom had put it on course to beat the historic number.

Chief executive John Morgan told 黑洞社区 the firm, which dates back to 1977, decided to put out an unscheduled trading update after upgrading its profit forecast by double digits.

Analysts are now predicting a pre-tax profit for the year of 拢109m, up 17% on its previous forecast made in February when it announced its 2020 results.

Morgan, who had already said it expected to beat its profit record this year, added: 鈥淲e wouldn鈥檛 have upgraded so early if we didn鈥檛 feel positive about the year as a whole.鈥�

In its update, the firm said it expected its average daily net cash balance to be 鈥渟ignificantly鈥� more than the 拢180m previously forecast with the figure for the period between the start of the year and 20 April standing at 拢288m.

鈥淗aving a strong balance sheet is key,鈥� Morgan added. 鈥淵ou need a good balance sheet because things can go wrong. You need to be good payers to the supply chain.鈥�

Morgan said its fit-out arm was on track to beat its medium term operating profit target of 拢35m with Morgan admitting he was 鈥減leasantly surprised鈥� how well the market has held up in the wake of the covid-19 pandemic.

He said he expected the division to have a record order book this year 鈥� the firm does not count jobs where it is preferred bidder 鈥� and added: 鈥淲e鈥檙e doing quite a lot of big jobs at the moment, new buildings in the City and places like that.鈥�

He said the expected glut of work from businesses reconfiguring their office space ahead of staff returning to the office had not happened yet. 鈥淧eople are thinking about it but we鈥檙e not seeing it as much as I would have expected. People don鈥檛 know what the post-covid world is going to be like.鈥�

Morgan added: 鈥淸The pandemic] has increased the trend of people working from home. What would have taken 10 years has taken one. It鈥檚 speeded up those trends. But the office is not dead, it鈥檚 a place to exchange ideas and views and we鈥檙e finding companies want to get their people back.鈥�

Workloads from its construction and infrastructure business were also on the rise with the firm picking up more public sector building jobs, such as schools, where typical contract values are between 拢15m and 拢20m. In infrastructure, Morgan said the firm had won more work on the Tideway super sewar scheme in London as well as extra nuclear work at the decommissioning of the Sellafield nuclear plant in Cumbria.

Numis analyst Jonny Coubrough said it expected this year鈥檚 pre-tax profit to be 21% ahead of the figure it posted in 2019 which itself was a record 拢89m. It said that profit for next year would remain flat at 拢109m.

Morgan Sindall said its order book at the end of last month was 拢8.1bn, up 8% on the same period last year.