Morgan Sindall warns on profit, withdraws guidance due to Covid-19
Construction and regeneration company Morgan Sindall withdrew its guidance and warned on profits on Wednesday as it said the Covid-19 outbreak was disrupting operations.
During the first 10 weeks of the financial year, the group continued to perform in line with its expectations, with continued strategic and operational progress across all its activities, it said.
However, it is now experiencing disruption to its operations in a number of areas. Certain construction sites have already closed under instruction from the relevant clients and this is expected to increase across a number of divisions and activities, it said.
In addition, activity on other sites and projects is slowing and progress with some development schemes in the regeneration activities is becoming more uncertain.
"As a consequence, it is anticipated that the extent of the overall disruption will inevitably have a material impact on group profitability for the year," it said. "Given the evolving and dynamic nature of the situation, it is too early to quantify the impact and so the group is withdrawing its previous market guidance until greater clarity returns."
The company said it was cancelling the 38p a share dividend announced on 20 February but may consider paying a second interim dividend in lieu of the cancelled final dividend once there is greater visibility on the impact of the outbreak.
Chief executive John Morgan said: "These are clearly challenging times and we continue to take the appropriate action to mitigate the impact of Covid-19. The group remains well funded, with good cash liquidity and an order book of circa £7.6bn, underpinning our confidence in the group's long-term prospects."