Update: Mixed prospects for Morgan Sindall

10th Aug 2009 17:24

Construction and regeneration group Morgan Sindall reported a mixed outlook on future prospects as it posted a sharp drop in profits at the interim stage.Profit before tax in the half year to June 30 fell to £20.5m from £28.6m on revenue that slipped 8% to £1.14bn. The board maintained an interim dividend of 12p.The group benefitted from an improved performance and contribution from construction and infrastructure services divisions. The two divisions accounted for about £800m of total revenues.Chairman John Morgan said he expects the firm to shift its focus to the private sector as public sector spending starts to fall back."Things are looking good going into 2010, but beyond that things will tighten in the public sector," he told ShareCast.Morgan Sindall's construction division saw revenues slip to £378m from £418m over the same period the previous year. While the market has remained reasonably robust underpinned by strong public sector demand for education and health facilities according to the firm, it is cautious on the outlook for public spending beyond next year.However, while revenue was also lower at the fit-out division, falling to £160m from £205m, the firm said it was seeing tentative signs of improvement in the short term. The division, whose projects involve fitting out interiors of offices, hotels and other buildings, said it expects to tender £220m worth of projects in the second half, compared with £74m in the first half. Morgan was confident of the firm's future prospects."Operationally and financially we are well set to take advantage of the opportunities for further growth that will arise in our chosen markets," he said."We are confident of meeting our expectations for 2009."