Morgan Sindall Group posts slump in 2013 profit

18th Feb 2014 11:00

Morgan Sindall Group disappointed with a decline in adjusted full-year pre-tax profit, blaming high competition and increased input costs in the Construction & Infrastructure and Affordable Housing divisions. The construction and regeneration group posted a a 34% plunge in earnings to £31.3m (2012: £47.1m), after a 2% rise in revenue to £2,095m was offset by rising sales costs. On a reported basis, profit slumped 59% from £34.2m to £13.9m, pushing basic earnings per share from 72.5p to 35.4p. Chief Executive, John Morgan said: "2013 has seen challenging conditions predominate across most of our markets, with competitive pressures impacting on margins and profitability. Notwithstanding this, the positive operating cash flow generated by the business has allowed us to make further investment in strategic assets, key skills and resources, which positions the group well to benefit from future growth opportunities.During the second half, the group saw some signs of increased activity and market confidence, with the order book up 8% and the regeneration & development pipeline up 23%. The total dividend payment for the year was on par with the 27p paid in 2012. Looking ahead to 2014, Morgan added: "Although there are signs of improving conditions in some of our markets, it is anticipated that upward pressure on supply chain costs and skills availability will provide additional management challenges. "Against this backdrop, we remain confident that our robust order book and on-going disciplined approach to contract selectivity will support the delivery of growth in this year and beyond." The share price fell 6% to 743p by 11:24 Tuesday.NR