‘Disappointing’ services performance fails to dampen Morgan Sindall

Cost pressures and ongoing operational challenges have pushed Morgan Sindall’s property services division to a £16.8m loss. The construction and property firm, which owns Muse, reported total revenue of £4.1bn for the year ended 31 December 2023, up by 14% on 2022. The firm said the performance of its property services division was “very difficult and disappointing”, slipping from a £4.3m operating profit to a double-digit loss. It expected the division to return to profitability in 2025, however. Profit also declined in the firm’s urban regeneration business, Muse, dropping from £18.9m to £14.8m, with revenue down from £244m to £185m. Morgan Sindall said the decline in profit was due to the scale, nature and timing of scheme completions across the overall development portfolio. Muse’s development portfolio included 12 projects on site at the year end, totalling £932m gross development value, with a further nine projects, with a GDV of £313m, expected to start on site this year. At the year end, the regeneration order book amounted to £1.8bn, a reduction of 1% on the prior year end. Looking ahead, Morgan Sindall said it expected to see something of a hiatus in development work as the gap between work finishing on projects in late 2023 and new projects starting takes effect. Chief executive John Morgan said: “Despite facing market headwinds in the year and the disappointing losses in property services, the diversified nature of our operations and capabilities has allowed us to continue to make significant strategic and operational progress. “Looking ahead, while there remains some uncertainty in the wider economy, reducing inflation and the prospect of lower interest rates provides a backdrop of confidence for the year ahead. Together with our high-quality and growing order book spread across a wide number of sectors covering the built environment, we are well-positioned for the future and on track to deliver a result for 2024 which is in line with our current expectations.” Image from Morgan Sindall