Restructuring costs impact on Morgan Sindall profits

However, founder John Morgan, who returned as chief executive in November to shake up the company, says that the reorganisation has made the company better placed to cope with continuing difficult market conditions. This includes a greater focus on infrastructure sectors.

“I believe our strategy is robust and our aim is to remain focused on those UK markets where we can develop a leadership position,” he said. “My priorities are on improving margins, focusing on our strengths in delivering complex projects, appropriate capital allocation, driving increased collaboration across the group and developing new and emerging opportunities.”

Group revenue for the year to 31 December 2012 was down 8% to £2,047m (2011: £2,227m). Pre-tax profit was down 15% to £34.2m (2011: £40.0m). However, excluding amortisation and non-recurring items (the £10m reorganisation cost), profits were up 4% to £47.1m.

By division, the results were:

Construction and infrastructure: Operating profit decreased to £19.7m (2011: £21.1m) on revenue of £1,168m (2011: £1,268m).

Fit out: Operating profit decreased to £11.3m (2011: £12.4m) on revenue of £427m (2011: £438m).

Affordable housing: Operating profit decreased to £11.5m (2011: £18.5m) on revenue of £386m (2011: £462m).

Urban Regeneration: Operating profit decreased to £2.7m (2011: £3.9m) on revenue of £62m (2011: £57m).

The group forward order book was £3.1bn at year-end (2011: £3.4bn).

Mr Morgan added: “2012 has seen a solid performance in what has been a very tough market. The newly structured board is focused on managing the business tightly to ensure we emerge from the downturn in a strong position to take advantage of the opportunities we believe lie ahead.  Our exposure to infrastructure continues to grow, and we see further opportunity to leverage our strong track record and gain market share. The momentum in our regeneration pipeline reinforces our confidence that returns from our investment will start to increase over the medium term and deliver superior returns.”

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