Morgan Sindall Group Half Year 2026 Results [Ext]

Hey, I'm really pleased to say we've delivered another set of record half-year results. Actually, excluding the COVID year, this is the 11th consecutive year. And indeed, it's the first time we have exceeded 100 million profit in the first half. Now, each of our standalone businesses have experienced very different market conditions. It's the strength of our diverse operations, our long-term order book, which continue to be a key differentiator, giving us the required resilience.

Today's results for the half year once again reinforce our consistent track record of delivering strong, profitable, cash backed growth. Our key financial highlights over the last 6 months are as follows. Revenues were up 8% to 2.6 billion, followed by our profit before tax increasing 21% to 116 million, with a margin increasing to 4.5% compared to the previous year. A real testament to the high quality of earnings that have now been delivered through our businesses. Our average net cash in the period increased by 69 million to 423 million. And our visible workload also increased in the period up 3% to 19.5 billion, represented by our secured order book and preferred bidder work. This is where we have framework contracts with both the public and the regulated sector, together with work with private clients in the fit out space, and also long-term partnership agreements with councils, local authorities, and housing associations. But importantly, this consistently provides a really solid platform for the group to deliver revenues in periods to come. Based on these excellent results today, we have announced a 10% increase to our interim dividend, rising to 55 pence per share. In partnership housing, the business faced more challenging economic conditions resulting in a weaker housing market. Now, whilst contracting revenue still represents 2/3 of the division's overall revenues, they declined in the period by 21% to 247 million. In part due to the delays before and after the local elections earlier this year, and in part due to mix of homes delivered for our partners. But positively, revenues from our mixed tenure activities increased by 6% to 100 million. Now, overall, whilst revenues for the division fell by 14% to 347 million, the division still delivered a resilient performance with a profit contribution in the period of 13.2 million, in line with this time last year, but with an expanded operating margin of 3.8%. Now, visibility for this division of its future workload continued to increase in the period with a secured order book now growing to 2.5 billion and a further 3 billion pounds of work at preferred bidder stage, which forms the basis of our confidence in the delivery of our medium and long-term ambitions for this division. In mixed-use partnerships, the division continued to prioritize the number of projects starting on site, whilst balancing the near-term viability challenges which can influence the timing of those projects starting on site. In the first half of the year, the division successfully started five projects with a further eight planned for the second half, and by the end of this year, we expect to have 15 projects operationally on site. In the period, the division reported a small operating loss of 1.1 million as it continued to expand investment costs supporting those projects that are planned to start on site all throughout 2026. At the end of the first half, its development secured order book stood at 4.6 billion followed by a further 2 billion pounds of work at preferred bidder stage supported by nine sizeable development schemes. Once again, fit out delivered another outstanding and market-leading performance in the first half with revenues and profits up 19% each. Revenues at 996 million with its operating profits at 69.1 million. Now once again, influenced not only by the exceptional volumes, timing of project completions in the first half, excellent contract delivery, and the continuation of operational leverage which we've seen in previous periods. If we combine all of those factors, it led to an operating margin of 6.9% in the period in line with this time last year. It finished the period strong with a secured order book of 1.3 billion and preferred bidder work of 400 million. Construction delivered a standout performance in the first half as the division continued to apply a strong disciplined focused approach to risk management right from the selection stage through to operational delivery whilst aligning itself to sectors and markets it knows well and best. In the period, its profits materially increased by 47% to 24.4 million delivering an operating margin of 3.3%. Now with 98% of its work procured through frameworks held nationally, two-stage tendering processes, and directly negotiated work, the division continued with its strong work-winning momentum with a secured order book at the end of June of 1.9 billion and a further 1.3 billion at preferred bidder stage. And finally in infrastructure, the division continued with the deployment of its early planning and design activities for a number of framework contracts it had been awarded over the last few years. Notably in the period, this included Scottish Power Energy Networks and Sellafield. And more specifically, it's now moved into delivery phase for a couple of capital projects for the Great Grid Partnership. Elsewhere, the division continued to apply a high quality of operational delivery across the remainder of its contract portfolio. Overall, profits in the period were virtually in line with this time last year at 18.3 million, delivering a margin of 3.9%. Order book levels continue to remain strong at nearly 2 billion pounds with a further 600 million at preferred bidder stage.

The medium-term fundamentals for fit out remain strong. While in construction, we've continued to benefit from increased visibility and market share. As a result of this, we've increased the medium-term targets for both the fit out and construction divisions. Now, following two unscheduled profit upgrades this year, we remain confident that our full year expectations will be in line with current expectations.