Morgan Sindall's Fit Out Boom
Construction company Morgan Sindall experiences share growth, raised profit expectations boost earnings.
On Tuesday, Morgan Sindall shares soared like a motherfucker, after the construction company declared that its annual pre-tax profits would smash earlier predictions. The London-based firm attributes this colossal growth to its Fit Out division, which includes Morgan Lovell and Overbury businesses, which are experiencing 'fucking fantastic' trading activity.
Expectations for profits in the Fit Out division couldn't be more clear—they’re gonna fucking soar. The continued strong demand for retrofitting offices, a boon since the Covid-19 pandemic, has contributed significantly to the division's success.
In addition, profits in the construction segment are expected to breeze past estimates too, thanks to higher-than-expected revenues and an operating margin nestled comfortably within its target range of 3 to 3.5 percent. Everything else pretty much stays on track, according to the group's brief trading statement.
By late Tuesday afternoon, Morgan Sindall's shares climbed an astounding 15.6 percent to a staggering £44.40, making the company the undisputed FTSE 250 winner of the day. Over the past year and five years, its share price has skyrocketed by a whopping 72 percent and an eye-watering 239 percent, respectively.
Morgan Sindall has been in the construction game since 1977, helping build residential homes, overhauling office buildings, and upgrading public infrastructure like sewage systems, railways, and motorways. The company's resume boasts some heavy hitters, like the Thames Tideway Tunnel, the Northumberland Line, and the refurbishment of Plymouth city centre.
Since the Coronavirus plague, Morgan Sindall has seen a fucking crazy surge in trade related to retrofitting offices. This boom comes as major firms are on a 'flight-to-quality,' trying to create work environments that make employees giddy with joy and are eco-friendly, as they scramble to comply with stricter energy efficiency regulations.
In the upcoming year, Morgan Sindall has secured some impressive fit-out contracts from bigwigs such as legal juggernauts A&O Shearman, Latham & Watkins, and Travers Smith, professional services network PwC, fintech platform Wise, and banks Standard Chartered and Lloyds Banking Group.
It's also completed work on the new London Institute for Healthcare Engineering building, as well as fire station projects across the UK. Last year brought record results for the company, with its turnover jumping by 10 percent to over £4.5 billion and operating profits ballooning by 15 percent to £162 million.
Morgan Sindall achieved revenue milestones in all business segments, except mixed-use partnerships, although the division's secured order book more than doubled to £4.1 billion. Analyst Andrew Nussey from Peel Hunt remarks that "across its core construction markets, Morgan Sindall is killing it."
The good times are expected to continue, as analysts anticipate earnings to surge by 10 to 12 percent in 2025, primarily driven by the Fit Out division's continued outperformance, with further gains forecasted for 2026, thanks to a higher earnings base. Summer 2025 will bring more detailed financial results, shedding light on contract pipeline and performance.
In summary, the Fit Out division is on a roll, and analysts expect it to keep fucking rocking in 2025 and beyond, thanks to ongoing contract wins and the positive trends it's riding.
- The surge in Morgan Sindall's Fit Out division has been attributed to its continuous success in retrofitting offices, particularly observed since the Covid-19 pandemic, which aligns with the growth in the banking and finance industry as companies prioritize eco-friendly, employee-friendly work environments.
- The finance sector is also anticipating a significant increase in earnings for Morgan Sindall in 2025, mainly due to the continued outperformance of its Fit Out division, contributing to the company's overall growth in the business and banking industry.
- Morgan Sindall's Fit Out division, with its extensive experience and impressive clientele that includes banks such as Standard Chartered and Lloyds Banking Group, is expected to continue prospering in the mortgage and real estate segment of the industry.
