BUILDING group Morgan Sindall reported a 13 per cent leap in profits yesterday despite weaker revenues for the first half of the year.
The group, which has a host of infrastructure and social housing subsidiaries, said pre-tax profits had shot up from £16.7m last year to £18.8m for the first six months of this year – despite an eight per cent fall in revenues, down £87m to £1bn.
The firm maintained its 12p dividend.
Executive chairman John Morgan said: “Despite the challenging economic environment, we are encouraged by the continuing opportunities in growth infrastructure sectors and we remain committed to investing in our regeneration business to drive growth over the medium to long term.”
The firm reported a “sound” forward order book with £3.2bn of work in the pipeline, though this is down from £3.5bn last year. The sector as whole has seen activity fall in the first half of this year.
Numis analyst Howard Seymour said: “Morgan Sindall’s half year results are slightly ahead of our forecasts for the half year, but this reflects timing differences and we are leaving full year estimates unchanged.
“In our view the company is trading well against a backdrop of tough market conditions.”
Liberum Capital analyst Joe Brent added the firm’s fortunes could be tied to government private financing initiatives.
He said: “The order book has fallen from £3.5bn to £3.2bn. Government rhetoric is supportive but actions are yet to show a benefit. We are still waiting for ‘son of PFI’.”
Shares closed down half a per cent.