Morgan Sindall nurses profit fall
The group – which includes Morgan Sindall construction, urban regeneration specialist Muse Developments and affordable housing developer Lovell – yesterday posted a 19 per cent drop in adjusted pre-tax profits, which fell to £25.2 million last year. Problems on a “small number” of construction contracts and a drop in margins to just 0.3 per cent slashed that division’s operating profits by more than two-thirds to £3.5m.
In Scotland, the construction division works with a number of local councils on school refurbishment and other building work. It is also partnering with Network Rail on the £250m Edinburgh-Glasgow Improvement Programme (EGIP), a two-year project of infrastructure upgrades.
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Hide AdUrban regeneration, which includes Muse operations based out of Glasgow, Leeds, London and Manchester, put in a stronger performance as operating profit jumped nine-fold to £10m.
Construction progressed on 18 projects across the UK, including the controversial £107m Marischal Square development in Aberdeen.
Stephen Turner, Scottish regional director for Muse, said the company has made “significant progress” at Marischal Square. The mixed-use scheme of offices, retail and leisure space is due for completion in 2017. “2014 had been a positive year for us, with renewed confidence in the market, increased appetite for investment and continued support from our public sector partners,” Turner said.
Lovell remained busy in Scotland with a string of affordable housing projects, but across the UK as a whole the division suffered a 30 per cent decline in operating profits, which fell to £6m. That followed an expected loss of £3.5m on maintenance activity.
Morgan Sindall’s chief executive, John Morgan, said: “Whilst there have been strong performances from fit out and urban regeneration, the overall group result for the year is disappointing, having been adversely impacted by a small number of construction contracts in construction and infrastructure.
“The progress in urban regeneration is particularly pleasing as it supports our long-term regeneration strategy and provides a positive platform for further investment in regeneration, leveraging off our existing strong market positions.”
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