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Morgan Sindall Group PLC on Thursday said profit fell in 2022 due to exceptional charges, but it expects to deliver 2023 results in line with its expectations.
The London-based construction company reported pretax profit was £85.3 million last year, down 32% from £126.2 million in 2021. The company said the fall was due to an exceptional building safety charge of £48.9 million.
The charge, which was in line Morgan Sindall’s guidance back in November of £40.0 million to £50.0 million, relates to a recent UK building safety act. The new rules require the removal of flammable cladding from tall buildings and were put in place in response to the fatal Grenfell Tower fire in London in 2017.
Adjusted pretax profit was £136.2 million, up 6.6% from £127.7 million in 2021.
Revenue was £3.61 billion in 2022, increasing 12% from £3.21 billion in 2021. Morgan Sindall said significant strategic and operation progress was made in spite of market headwinds.
Looking into 2023, the company said it has a ‘substantial’ order book, with a secured workload of £8.5 billion. This is down 2% from a year ago.
The company declared a final dividend of 68 pence per share, bringing the total to 101.0p, up 9.8% from 92.0p in 2021.
Chief Executive Officer John Morgan said: ‘While there remains significant macroeconomic uncertainty, Morgan Sindall is a strong and agile business which is well-placed to overcome the challenges of the coming year and also well-positioned to take advantage of the opportunities that arise in this type of environment.
‘There are early signs that inflation, particularly labour inflation, has plateaued and is starting to fall in some areas. We look forward with optimism and although it is still early in the year, we’re well-positioned to deliver a result for 2023 which is in line with our current expectations.’
Morgan Sindall shares were up 7.2% trading at 1,752.00p per share on Thursday morning in London.
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