- Profit seen ‘materially’ above budget
- Demand for refurbished offices strong
- Shares rally 14% to record high
Investors in construction and building services group Morgan Sindall (MGNS) had plenty of reasons to be cheerful after the firm raised its profit forecast for the year to December thanks to better-than-expected trading in its Fit-Out business.
The shares – a running Great Idea – leapt 460p or 14% to £37.10 taking them to the top of the FTSE 250 leaderboard and to an all-time high.
‘SIGNIFICANTLY AHEAD’
The firm revealed that since its last trading update in early August and due to ‘material profit growth ahead of expectations’ from its Fit-Out division, its full-year results would be significantly ahead of its previous forecasts.
Profit in the Fit-Out business – which mainly designs and refurbishes office space for other property companies – has ‘continued to strengthen significantly due to exceptional volumes’ and is now expected to ‘materially exceed’ the group’s previous expectations.
The secured order book as of the end of September was £1.3 billion, up 15% from the December 2023 position, providing strong visibility for 2024 and beyond.
At the same time, profit in the Partnership Housing business is also expected to be ahead of forecasts as it continues to grow its relationships with the public sector.
Both the Construction and Infrastructure businesses are on target to meet their revenue and margin targets for the year, and while trading in Mixed-Use Partnerships has been subdued, the division has secured preferred bidder status on a number of sizeable schemes across the UK.
In total, the group’s secured order book at the end of September was £8.9 billion, in line with the end of 2023 and representing more than two years worth of work.
