Morgan Sindall revenue hits £3.6bn

Morgan Sindall has become the UK’s second-largest contractor after posting revenue of £3.6bn in 2022.

This morning (23 February) the contractor unveiled yet another set of “record” results, with the company’s revenue increasing by 12 per cent, from £3.2bn, during 2022. This means Morgan Sindall is now larger than Kier, which earned £3.3bn in its last financial year.

Morgan Sindall’s pre-tax profit fell by 32 per cent in 2022 from £126m to £85m – however, the company said this was mainly due to writing off £48.9m to cover historic building-safety liabilities.

The group hinted that some of the written-off money could be recouped through the courts, saying its provision “does not include the benefit of any potential income subsequently received for recoveries from third parties”.

Morgan Sindall said its adjusted pre-tax profit, which excludes the building safety charge and £2m of intangible amortisation, increased by 6 per cent to £139m. This means the company had an adjusted margin of 3.9 per cent, down slightly from 4.1 per cent the previous year.

Morgan Sindall’s net cash at the end of 2022 dipped by £3m to £355m, while the business said it had a secure order book of £8.5bn – 2 per cent lower than at the end of 2021.

Morgan Sindall’s 2022 results by division

The group said its 2022 results – which feature its largest-ever annual revenue – came despite a “significant headwind” from “inflationary pressures and supply issues”.

The contractor noted that “rising energy prices, supply constraints on certain materials and increased trade and labour costs have continued to place upward pressure on total build costs”.

It added that it was able to offset increased build costs through “a combination of contractual protection, operational efficiencies, flexible sourcing and by house sales price inflation”.

However, the firm admitted that on some projects it had been impossible to mitigate all cost increases, so “the resulting impact of margins has been unavoidable”.

Morgan Sindall chief executive John Morgan said: “These results are another record for the group and they reflect the high quality of our operations and the talent and commitment of our people.

“With the more challenging economic backdrop, our strong balance sheet, including our substantial net cash position, provides us with confidence and enables us to continue operating efficiently and effectively.

“Particularly, it allows us to continue making the right decisions for the long term, to maximise our competitive advantage, and to best position us in our markets for continued sustainable long-term growth.”

He added: “While there remains significant macroeconomic uncertainty, Morgan Sindall is a strong and agile business which is well-placed to overcome the challenges of the coming year and also well-positioned to take advantage of the opportunities that arise in this type of environment.”