Morgan Sindall chief executive John Morgan has said his company is “very selective” with its work and does not want to start taking on larger projects.
The publicly listed firm turned over £3.6bn in 2022 – an increase of 12 per cent on 2021 and up 72 per on 2013. It means the contractor is now the second-largest in the UK, eclipsing Kier, which earned £3.3bn in its latest financial year.
But Morgan (pictured), who co-founded the business in 1977, told Construction News that he plans to stick with lower-cost and lower-risk construction projects – and to use Morgan Sindall’s strong balance sheet to invest in its Partnership Housing business.
“We win quite a few [projects] but the size tends to be smaller,” he said. “We do the odd large job, but that’s not what gets us out of bed in the morning. We like repeat jobs and long-term workstreams.
“We don’t want a £200m job […] We don’t do mega jobs and don’t do jobs that lose mega money. We are fairly risk-averse and very selective.”
Morgan added that he would like Morgan Sindall’s turnover to continue ticking upwards – but added that his priority was to “make business better for stakeholders” and to “delight clients”.
He also vowed not to use the company’s £354m in net cash on buying other companies – and would instead invest in organic growth across all of its five divisions, particularly its Partnership Housing division, which specialises in work with local authorities and housing associations.
Morgan Sindall’s full-year results, which were published yesterday, stated that “demand for the partnership model […] remained positive throughout [2022]”, but that the division “experienced significant slowdown in its sales rates of private homes on its mixed-tenure sites”.
Morgan said that despite cost pressures on materials and increasing interest rates, his company would target the partnership housing sector, as there is “very strong government support for the schemes”, which can span several years and are therefore less affected by material shortages and interest rates.
Morgan Sindall made an £85m profit in 2022, despite writing off £48.9m to cover its historical building-safety liabilities.
Traders responded positively to the results, with the company’s share price surging by 8.1 per cent – giving Morgan Sindall a market capitalisation, or value, of £837m when markets closed on Thursday (23 February).
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Will Ing