17-06-2025
Morgan Sindall shares soar as construction group ups profit forecast
Morgan Sindall shares soared on Tuesday after the construction company said that its annual pre-tax profits were set to surpass previous estimates.
The London-based firm believes profits at its Fit Out arm, which includes the Morgan Lovell and Overbury businesses, will 'significantly exceed' prior predictions thanks to continued 'strong trading activity'.
It further expects profits to exceed forecasts in its construction segment, supported by revenue-beating expectations and an operating margin within its target range of 3 to 3.5 per cent.
All other segments are on track to perform in line with estimates, the group said in a brief trading statement.
Shares in Morgan Sindall climbed 15.6 per cent to £44.40 by late Tuesday afternoon following the firm's announcement, making them the FTSE 250's best performer by far.
It means the company's shares have skyrocketed by around 72 per cent and 239 per cent over the past 12 months and five years, respectively.
Founded in 1977, Morgan Sindall helps construct residential homes, renovate office buildings, and upgrade public infrastructure, such as sewage systems, railways, and motorways.
Major projects the business has worked on include the Thames Tideway Tunnel, the Northumberland Line, and the refurbishment of Plymouth city centre.
Since the Covid-19 pandemic, Morgan Sindall has enjoyed a surge in trade related to retrofitting offices.
This comes amidst a 'flight-to-quality' among major firms seeking to make their work environments better for employees and more eco-friendly in line with stricter energy efficiency regulations.
It won fit-out contracts in 2024 from the likes of legal giants A&O Shearman, Latham & Watkins, and Travers Smith, professional services network PwC, fintech platform Wise, and banks Standard Chartered and Lloyds Banking Group.
The company also secured contracts to refurbish the roof at London's Liverpool Street station and completed work on the new London Institute for Healthcare Engineering building, as well as five fire station projects across the UK.
Morgan Sindall achieved record results in 2024, with its turnover rising by 10 per cent to over £4.5billion and operating profits expanding by 15 per cent to £162million.
It scored higher revenue in all business segments, except mixed-use partnerships, although the division's secured order book more than doubled to £4.1billion.
Andrew Nussey, analyst at Peel Hunt, said: 'Across its core construction markets, Morgan Sindall is performing well.'
'In Fit Out, we assume some normalising of revenues and margins over the medium term, but we do not discount further near-term outperformance.'
