Morgan Sindall Share Discussion Threads

[piedro] 02/3/2022 05:02

FWIW,
In pictures ...



Looks a bit shaky as it's all about margins ...


And here is an 'unapproved' chart, but why I am still in.


Piedro :-)

[woodyjmw] 26/2/2022 11:24

Chart looks very bullish to me, much higher volumes recently, rising lows, rising RSI during the recent double dip, if it moves above the previous recent high in early Feb, then I would think it will have much further to go, at least to retest the all time highs.

[woodyjmw] 24/2/2022 18:04

Yes great results on a day which will live in infamy. Worrying about share price performance seems a bit trivial at this time. Can we hope for a rerating of this company, EPS of 226p and dividend 3 times what it was in 2019? This is the section from the results on cladding - no material impact currently expected:

The Group has considered the public letter to the Residential Property Developer industry from the Department for Levelling Up, Housing & Communities dated 10 January 2022, as well as the letter dated 22 January 2022 to the Construction Products Association and all other related Government press releases, communications and publications.

The Group fully agrees that the costs of remediation should not be borne by leaseholders and is supportive of working with the Government, industry and other key stakeholders to determine a solution to the issue of historic cladding and fire safety defects in buildings.

The Group has considered the scope of relevant cases across its business in line with the criteria set out in the 10 January 2022 letter and this review is ongoing. It is possible that a relatively small number of cases will be identified where the Group has a liability leading to remediation. In accordance with the Group's past practice, the Group is committed to meeting its liabilities as they are identified. Whilst any such costs incurred are not expected to be material and will likely span a number of years, the industry-wide solution to the issues set out in the 10 January 2022 letter is still being determined and therefore any liability arising therefrom cannot be reliably estimated.

In common with the rest of the industry, the Group will begin paying the Residential Property Developer Tax in 2022.

[master rsi] 24/2/2022 13:32

2,250p +100p (4.65%) / Morgan Sindall doubles profit in 2021 on improved margins
(Alliance News) - Morgan Sindall Group PLC delivered a record set of results on Thursday, as the construction sector recovered from Covid-related disruption.

The London-based infrastructure construction company said profit before tax doubled to GBP129.8 million in 2021 from GBP60.8 million the year before. Earnings per share were similarly doubled to 212.4 pence from 99.8p.

Revenue for the year rose by 5.8% to GBP3.21 billion from GBP3.03 billion in 2020, and by 4.6% from the pre-pandemic comparative of GBP3.07 billion in 2019.

Operating margin also increased to 4.1%, up 180 basis points from the prior year's margin of 2.3%, and up 110 basis points from 2019's margin of 3.0%. Despite a 7% drop in Construction & Infrastructure revenue, operating profit grew by 63% over the past year thanks to the improved margin.

Morgan Sindall said better operational delivery, "disciplined contract selectivity", risk management, and a favourable project mix were behind its increased margin.

The final dividend was increased by 55% to 62.0p per share from 40.0p in 2020. The total dividend for 2021 was up 51% year-on-year to 92p, from 61.0p. This represents a dividend cover of 2.46 times.

Morgan Sindall's share price was up 3.9% to 2,232.88 pence each in London on Thursday morning.

Reflecting its strong performance in 2021, Morgan Sindall has increased targets for some divisions. Revenue over GBP1 billion is now targeted in Construction and Infrastructure divisions, having achieved GBP694 million and GBP826 million in 2021 respectively. The company expects to finish 2022 "slightly above" its previous expectations.

Chief Executive John Morgan commented: "The group is in its best shape ever. 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.

"Underpinning these targets is our commitment to maintaining a strong balance sheet at all times and to hold a substantial net cash position. This continues to allow us to make the right long-term decisions for the business."

Net cash at year-end was GBP358 million, up from GBP333 million in 2020, and GBP193 million in 2019.

[rupe1958] 24/2/2022 07:29

Yes, looks very good. This is such a well-run business. Let's hope John Morgan doesn't retire any time soon.

A particularly good result from the Fit-Out diviison, which is higher-margin work.

The only negative thing that I've seen on a quick read is re. inflation in materials and labour. I haven't read the separate section on cladding.

Not a good day to be releasing results, but we may just be a riser in a falling market.

[cravencottage] 24/2/2022 07:06

Wowser!

cracking set of numbers from MGNS.

Congrats to all holders!

[woodyjmw] 22/2/2022 22:07

Next results to be announced this Thursday 24th Feb, hoping for another positive update, on the back of the recovery in construction output. Management of increasing costs will be key, together with usual factors.

[galeforce1] 22/2/2022 11:49

Results this Thursday. Presumably there will be no big surprises as there was a trading update in November. Stockopedia says the estimated net profit for 2021 will be £104m, but is forecasting a dip to £96m in 2022.

MGNS usually has a nice way of surprising to the upside, so I'm hoping to see £110m net profit, more positive news across the order book and a rise in the dividend. MGNS looks very good value at £21-odd. When everyone calms down about Russia annexing the Donbass (3000 miles from Britain and populated by 1.5m Russians who want to be part of Russia), we will hopefully get back towards £25.

It's definitely good news that the fit-out division Overbury is getting contracts like re-fitting the Citi tower in Canary Wharf for £300m.

Potential negatives? Cladding removal costs? Continuing slow action at the Regeneration division? Labour inflation?

[piedro] 27/1/2022 15:15

Overbury gets green light for £300m Citi Tower refurb

[woodyjmw] 18/1/2022 18:23

Will mgns get a positive read across from good results from Henry Boot?

[woodyjmw] 10/1/2022 20:15

Not mentioned as a risk in the last annual report that I can see, would be good to know, but any sector wide levy might affect all?

[galeforce1] 08/1/2022 15:53

Is MGNS likely to be impacted by Gove's scheme to force builders to pick up the tab for removing/replacing cladding?

I doubt that there is much or any exposure, but if there is, it will be in the Regeneration of Muse Development businesses.

[woodyjmw] 07/12/2021 18:33

With Construction PMI remaining strong, could/should be another leg up for MGNS.

[m12rtn] 04/11/2021 17:15

Construction Enquirer headlineConstruction "powers ahead" as supply shortages ease

[galeforce1] 03/11/2021 10:53

It's a good update, but I suppose what worries the analysts is that line "inflation in the supply chain and the availability of materials and labour have remained manageable."

'have remained manageable' is probably update-speak for 'quite difficult' or 'adding significant cost'.

But it's reassuring that despite these pressures the they see a 'full year performance above the previous expectations'. Of course, they will have been deliberately conservative in those previous expectations.

The EV here is under £800m, and profits should be in the range £100-£110m, so it still looks good value to me. There's also the handy dividend at 4%.

[brucie5] 03/11/2021 09:57

Good news. It's been rather a lacklustre performer since I bought in but comes up on so many metrics and screens, which are rather confirmed by this update. In due course would nice to see this reflected in dividend increase?

[master rsi] 03/11/2021 09:11

MGNS 2,265p + 35p +1.57% - Trading Update

Morgan Sindall Group plc ("the Group") today provides an update on current trading and the outlook for the 2021 financial year.

Group performance and outlook
Since the time of the half year results on 4 August 2021, trading has continued to be strong. Inflation in the supply chain and the availability of materials and labour have remained manageable. Based on the performance to date and with good visibility of secured workload through to the end of the year, it is now expected that the Group will deliver a full year performance which is slightly above its previous expectations.

Current trading by division

Trading has remained strong in Construction & Infrastructure; the Construction activities are expected to deliver a full year operating margin of c3%, while the operating margin in the Infrastructure activities is expected to be well in excess of 3.5%. Both activities are benefiting from the continued focus on long-term client relationships, operational delivery and risk management....

[brucie5] 09/9/2021 18:36

Instructive, to a degree. But you'd need to tell me how high the next pivot point.

[piedro] 09/9/2021 15:24

The chart from 2001 ...

[brucie5] 09/9/2021 14:07

20% will do me for starters.
IC is only to supply a narrative. I try to work with screens and charts.

[pastybap] 09/9/2021 14:02

Based on current value and medium term growth, I can see it going much higher before any "halving". But I wouldn't be quoting the IC!!

[brucie5] 09/9/2021 11:29

Piedro, you mean it's going to halve? Gosh.

This was the last IC coverage in August - they've been bullish for some time.



This is particularly encouraging:

"Indeed, profitability and underlying margins across all its divisions increased. The growth of Fit Out, which fits out office space, is particularly pleasing given that it is the highest margin portion of the business. And it's worth noting that its order book was up 42 per cent from the year end to an all-time high of £581m."

But I will ensure a tight stop-loss should, as you suggest, the markets turn on this one.
Wit that in mind, what if anything, are you buying at the moment?

[piedro] 09/9/2021 11:24

Brucie5, good luck.

When the economy turns you should be able to pick up stock at around £12.00

I bought at £4.5, sold at £12.00 and it went to £18.00
Re-bought at £5.50 and am staying put for the moment.

AIMHO.

[brucie5] 09/9/2021 10:01

Just bought some for my otherwise rather value orientated dividend folio. Only 3.3% but this looks like excellent growth and appears on too many screen to ignore. Strong chart too.