Morgan Sindall reports record £3.2bn revenue
The construction group said that its £127.7m pre-tax profit was double that of last year and represented an increase of 41% over 2019 in its annual financial report for the year ending 31 December 2021.
Morgan Sindall Group is active throughout the North West with its regeneration arm Muse Developments, fit-out company Overbury, partnership housing division Lovell Partnerships and construction firm Morgan Sindall Construction.
The entire group reported £358m in net cash at the year-end, which was up £25m from 2020 and £165m from 2019. The group has a secured workload of £8.6bn, an increase of 4% from the year before.
“2021 has been an excellent year for the group with progress across the board,” said Morgan Sindall Group chief executive John Morgan. “Our record results reflect the high quality of our operations and the huge talent and commitment of our people.
“The group is in its best shape ever,” Morgan continued. “Our strategic focus on construction and regeneration is driving positive momentum across the group and is enabling us to upgrade our divisional medium-term targets today which provide the framework for our next stage of growth.”
Morgan said the company was committed to having a strong balance sheet at all times. He also added that the group wanted to deliver “economic, social and environmental value or all our stakeholders”.
That ambition has led Morgan Sindall to aim to be net zero by 2030 by reducing carbon emissions by 60% (based on 2019 figures) and offsetting the remainder. Already emissions have been reduced by 37% according to the end-of-year results. Part of the offsetting work has also begun, with Morgan Sindall Group beginning a 25-year project to create nine woodlands on Blenheim Estate in Oxfordshire.
Morgan Sindall Group has also said that it has purchased 72% of its electricity from renewable sources and reduced the amount of waste it produces by 30%.
Morgan Sindall Group’s share price went up by 2.8% after the publication of the report. Find a breakdown of how each of its divisions performed below.
Work began on Muse’s Eden in 2021. Credit: via planning documents
Muse Developments
Muse reported £203m in revenue, an increase of 64% from 2020 and 69% from 2019. It has a £2.6bn secured order book.
Regarding its performance, Muse credited its work on the Salford Central regeneration scheme, the delivery of 520 homes at New Victoria in Manchester as well as other projects outside the North West.
Muse had 11 projects reach practical completion in 2021 including HMRC’s 157,000 sq ft regional hub at Three New Bailey, 167 apartments and 44 townhouses at Salford Central.
In 2021, construction also began on two large Salford commercial projects: Eden, an operationally net zero office development, and the northern headquarters for BT. In Birkenhead, work has begun on 150,000 sq ft of offices. Construction also began on 106 homes at Islington Wharf in Manchester and a Holiday Inn at Talbot Gateway in Blackpool.
Matt Crompton, managing director at Muse, said: “With well-documented challenges on-going in 2021, our colleagues have risen to the challenge once again, continuing to work collaboratively with our partners to deliver place-changing regeneration.
“We remain in a strong position and continue to grow, with a broad range of developments across the UK in a variety of sectors and an extremely healthy forward pipeline.
“Our key focus continues to be, working with our partners to repurpose under-utilised urban areas to create sustainable, diverse and vibrant places driving economic growth, investment and opportunities for local communities.”
Roughly 38% of Muse’s order book is based in the North West.
Morgan Sindall Construction began work on the Birkenhead offices in January 2022. Credit: via Active Profile
Morgan Sindall Construction and Infrastructure
Revenue was £1.5bn in 2021, down 7% from the year before but up 2% from 2019. The division has a secured order book of £2.7m.
The annual review highlighted Morgan Sindall Construction’s appointment to deliver initial works for the redevelopment of North Manchester General Hospital in Crumpsall.
In terms of infrastructure, a key project from the past year was the detailed design of Carlisle Southern Link Road for Cumbria Council.
Going forward, Morgan Sindall Construction has been named the preferred contractor for the Kirkby Cinema project. The group has also started work on Wirral Growth company’s £75m Birkenhead offices. Wirral Growth Company is a joint venture between Wirral Council and Muse.
Lovell Partnerships
The partnership housing arm of Morgan Sindall Group reported revenue of £572m in 2021, an increase of 21% from 2020. According to Lovell, 2021 was the most profitable year in its history.
The secured order book for Lovell was £1.5bn at year-end.
Both the mixed-tenure and contracting aspects of Lovell performed well, according to Morgan Sindall. Mixed-tenure’s revenue was up 16% from 2020 to £323m, while contracting (which includes planned maintenance and refurbishment) was up 27% to £249m.
The increase in material costs and delays in product deliveries did impact the business, but Lovell said the additional costs were offset by sales price inflation and operational efficiencies.
“Throughout the last two years, in the face of extremely challenging trading conditions, we have been relentless in our ambition to work with our partners to build the nation’s much-needed homes,” said Lovell regional managing director Lee Sale.
“While our financial performance has exceeded previous results, it is the strength and unity of our team, that must be acknowledged for the successful delivery of over 3000 homes nationwide,” he continued.
“We are in great shape, and we go from strength to strength, forming long term partnerships with other like-minded organisations, building on our reputation as a trusted and agile business.”
Lovell has 48 mixed-tenure sites in construction or sales. It completed 1,653 homes in 2021 through open market sales, social housing and joint ventures. The average price of a Lovell home was £249,000.
Key projects for Lovell include its work on a 188-home development in Whalley with Trafford Housing Trust and a 650-home scheme in Pendleton with Together Housing Trust.
Overbury handled the fit-out of the India Buildings. Credit: Christian Smith for Place North West
Overbury
The fit-out firm reported revenue of £795m, which represented a 14% increase from 2020. The company’s order book more than doubled from 2020, with Overbury reporting it at £897m.
The company’s work outside of London increased to 42% of its revenue in 2021, however, Overbury predicts London will return to dominate around 70% of its revenue in 2022.
The majority of Overbury’s work revolved around traditional fit-outs, while 20% of its projects were design and builds.
Overbury handled the fit-out of HMRC’s 270,000 sq ft Liverpool office at the India Buildings.
Morgan Sindall Property Services
The property services arm of Morgan Sindall reported revenue of £134m in 2021, an increase of 20% from 2020 and 17% from 2019.
The company continued its work to help public sector housing by performing repairs and maintenance. The planned maintenance activity contracts took longer to recover from the lockdowns of 2020 than repairs contracts, which were mostly restored to normal volumes in 2021.
With that in mind, the order book for property services is £945m, a decrease of 3% from 2020.
The company is continuing to invest in technology and launched a new software platform in 2021 to provide real-time data to landlords and residents regarding energy efficiency.
