Increased operating margin leads Morgan Sindall to healthy interim profits

Leading UK construction and regeneration group, Morgan Sindall announced a significant increase in profits at the half-year stage thanks to revenue growth and operating margins.

A strong performance from the fit out division led to operating profits in that arm being up 27% on last year to £14.6m.

Meanwhile, construction and infrastructure, the wing that focuses on highways, rail, aviation, energy, water and nuclear markets saw operating margins rise to 1.1% and posted an adjusted operating profit of £7.6m.

The firm announced a total pre-tax profit of £23.17m, for a sharp 47% increase on the £16.1m posted in its half-yearly report in 2016.

Most impressively, Morgan Sindall stated it had average daily net cash of £132m, which was £156m higher than its negative £24m balance over the same time last year.

Commenting on today's result, chief executive, John Morgan said: "This is a strong set of results, driven by another period of margin and profit growth in Fit Out and further progress on margin recovery in Construction & Infrastructure. Reflecting our overall profit performance, our strong balance sheet and cash performance, and our confidence in the quality of our business, we are increasing the interim dividend by 23% to 16p per share."

Basic earnings per share were 42.5p, a 49% year-on-year increase.

With its order book up 5% to £3.8bn the firm was confident of "another strong performance" in the second half of 2017.

As of 1220 BST, shares had remained stable showing a 0.62% drop to 1,421.10p.