Combining the divisions, now trading as Morgan Sindall, has delivered £6m of annualised savings and the operating margin improved from 2.0% in 2009 to 2.2% in 2010.
Order book for the combined division increased by 21% to £2.0bn (2009: £1.6bn).
However, the 2010 workload was down. Construction & Infrastructure saw revenue fall from £1.5bn in 2009 to £1.3bn in 2010, and operating profit fall from £30.1m to £26.9m.
Reporting its preliminary results for the year to 31 December 2010, Morgan Sindall has reported a 5% fall in in total group revenue to £2,102m (2009: £2,214m). Pre-tax profit was down 9% to £40.7m.
The Affordable Housing division recorded operating profit up 8% to £16.1m on revenue of £387m (2009: £374m). Order book in this division improved from £1.3bn at the start of the year to £1.5bn at year end.
The Fit Out business increased its operating profit 7% to £14.8m (2009: £13.8m) on revenue up 43% to £415m (2009: £291m).
Order book for the group as a whole increased from £3.2bn to £3.6bn, helped by Urban Regeneration's £1.4bn development pipeline.
The balance sheet remains strong with net cash balance of £149m (2009: £118m), £100m of undrawn facilities and a defined benefit pension deficit of only £2m (2009: £3m)
Executive chairman John Morgan said: "2010 was a year of important strategic and operational progress for the group. The restructuring we conducted to create Construction & Infrastructure leaves us better placed than ever to meet our clients' needs, while Lovell's expansion in response and planned maintenance opens up exciting new market opportunities.
"Trading remains challenging, but we continue to secure profitable projects. We are well placed to exploit opportunities presented in the short-term, whilst carefully monitoring market trends to maximise long-term growth potential. The group remains financially strong with an exciting future."
He added: “The UK construction market is expected to weaken over the next three years and the industry is now anticipating the likely impacts of the changes in public spending following the Comprehensive Spending Review (CSR). Although capital expenditure directly from the public sector will fall in line with the CSR, the underlying need for infrastructure investment remains in the key sectors of health, housing, energy, transport and education.
“Our capabilities in project financing, combined with the construction and life-cycle services offered by our divisions, place the group in an excellent position to secure profitable opportunities as they arise. Overall we are pleased with the financial performance of the group in 2010 while the enhancements we have made to the group during the year leave us well placed to meet future challenges and opportunities presented by the market.”
Got a story? Email news@theconstructionindex.co.uk
