Revenue and operating profit rise nonetheless in group’s partnerships business.
England’s housing market is “still not as good as we expected by now”, according to the boss of a major contractor.
According to half-year results published this morning, revenue from Morgan Sindall’s partnership housing business, called Lovell, was up 6% to £405m with operating profit up 13% to £13m.
Meanwhile, revenue at its mixed-use partnerships business, Muse, fell 56% to £26m, with an operating loss of £1.5m.
Chief executive John Morgan expressed disappointment at the current state of the market and pointed to Wales, where the Help to Buy initiative is still up and running, as an example of where the housing sector could be boosted. “Any housebuilder would welcome a stimulus.”
The overall market he added was “normal. It’s not bad but not great. GDP growth is lower than we’d like it to be. Better GDP means more money to spend on capital projects.”
The group at large turned in a record set of half-year figures this morning as it once again upgraded expectations for its booming fit out business.
The firm said it expected annual operating profit at the division to now be between £80m and £100m in the medium term – up from the £60m to £85m it had predicted at the start of the year.
Its net cash balance at the end of June was up 10% to £390m while its order book stood at £12bn, up £600m from the end of last year.
The firm also raised targets at its construction division with revenue at the business upgraded to £1.5bn over the medium term from £1bn. Expected operating margins remained the same at between 3% and 3.5%.
Group revenue was up 7% to £2.4bn with pre-tax profit up 36% to £95m.
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