REGENERATION and construction firm Morgan Sindall said it was confident it could grow the business against a backdrop of tough market conditions, as the group unveiled a 12 per cent drop in profits.
Profits before tax and exceptional items fell to £45.3m last year compared with £51.3m the previous year while revenues rose six per cent to £2.2bn.
The group, which is involved in Crossrail, has been reducing its exposure to public-sector related work as the government’s austerity cuts and fierce competition for projects hurt margins at its construction and infrastructure division, where profits declined fell 22 per cent to £21.1m.
Executive chairman John Morgan, who founded the company in 1977, said the company has instead been focusing on expanding its regeneration pipeline of work in partnership mainly with local authorities.
Morgan Sindall is involved in 30-40 regeneration projects and hopes to capitalise on the release of public sector land – the government is pushing the release of land assets such as car parks from public bodies to fund regeneration.
The group urban regeneration arm doubled its profits to £3.9m and grew its pipeline of project from £1.4bn to £2.4bn including preferred bidder positions.
“Overall we think next year will be much the same as this year but we do have confidence that we can grow our business even if the market doesn’t improve, from these regeneration projects that we have already won,” he said.
In 2010 the group’s affordable housing division, Lovell Partnerships, bought Connaught’s troubled social housing maintenance division out of administration, saving 2,500 jobs.