Morgan Sindall Share Discussion Threads

[cruelladeville] 12/1/2023 16:35

Onwards and upwards here. Terrific quality company, good to see share price recovery.

[cruelladeville] 10/11/2022 14:56

Nice to see another good day for MGNS stock. Long may it last.

[cruelladeville] 04/11/2022 10:12

I like the company. In no rush to sell out of here. Enjoying the yield which is anomalously high at the moment.

[imastu pidgitaswell] 01/11/2022 14:45

Still holding? Perfect timing on that buying.

Just gone above the previous peak, but still way down on the start of the year levels.

Long way to go, given the fundamentals, surely?

[cruelladeville] 24/10/2022 17:17

My that was lucky!

[cruelladeville] 24/10/2022 10:10

Couldn't resist buying a few more shares at 1397p this morning. Averaging down purchase price somewhat here.

[cruelladeville] 14/9/2022 20:06

Looking like a >6% yield at today's closing price. Not often you see that here. I think I will top up my holding tomorrow.

[imastu pidgitaswell] 14/9/2022 08:25

It is very low liquidity in the first half hour or so. And (it seems to me) a definite absence of buyers most of the time.

I thought it had bottomed a couple of days ago, but not so clear now - although it might just be a higher low being put in place. Sector is also showing signed of turning - BBY at a 5 year high, COST rising and KIE bottoming (until they release their results?)

Good business this - excellent balance sheet and on around 8 times earnings now as well. Quite tempted, but awaiting progress on COST for the time being.

[cruelladeville] 14/9/2022 08:04

Must have been a glitch. Back to normal spread now.

[cruelladeville] 14/9/2022 07:28

A crazy 140p buy/sell spread this morning here?

[galeforce1] 15/8/2022 07:54

Note from Numis, following MGNS's H1 2022 results. The interesting bit is the last paragraph which explains the costs & complexities of the 'Developer Pledge'. MGNS previously signed this for the Partnership Housing Division, and stated the costs would be 'non-material'. Now it has been obliged to sign for the Urban Regeneration Division and costs are undoubtedly 'material'. £7m charge in H1. Looks like a further £40-£50m has to be paid up-front to the government, but much of this should later be recovered from contractors.


Morgan Sindall (Buy, TP: 3,000p) Upgrade driven by Fit Out momentum

Morgan Sindall has reported record H1 profit, delivering further growth on H1-21 which was itself a step change in performance. For context, EBIT is +52% vs H1-19. This is despite a very challenging operating environment in which cost inflation has impacted some project margins. Due to continuing strong momentum in Fit Out, we upgrade current year PBT +6%. As we argued in our recent longer note, we believe the division is benefiting from medium-term drivers of changing working practices and increased EPC requirements for commercial premises. With an orderbook equivalent to >2.5x revs and continued organic momentum across the divisions, we estimate medium-term targets represent c.40% further profit growth. We reiterate our BUY recommendation and £30 target price.
Download Upgrade driven by Fit Out momentum
(4 pages)

Group. H1 revs +9% y/y to £1.7bn with EBIT +4% to £56.9m at a margin -10bp to 3.4%. Market conditions were a headwind; the impact on total build cost and increased strain on the supply chain is expected to continue in H2. Demand remained resilient with the orderbook +2% y/y to £8.5bn. We upgrade NSe FY22 PBT +6% to £134m; we retain FY23 at this stage. The interim divi is +10% y/y to 33p and we now expect a full year divi of 100p (5.1% yield). H1 average daily net cash of £264m remains very high albeit -£30m y/y, predominantly due to investment in Partnership Housing. We now forecast FY22 av. net cash of £250m.
Divisional. Construction & Infra margin increased further to 3.2%; Infra volumes were lower y/y as expected due to timing, offset by growth in Construction (where preferred bidder work grew). Fit Out EBIT +10% y/y, and we now expect £50m for FY22; it maintained its high orderbook. Property Services delivered growth albeit still impacted by delays to decision-making. Partnership Housing EBIT +15% y/y with the margin +40bp to 4.9% and capital employed is now at £179m; av. site size has grown 39% with the number of sites +2%. Urban Regen adj. LTM ROCE was 20%.

Developer Pledge. As previously announced, Partnership Housing signed the developer Pledge and the provisions are not expected to be material to group. Urban Regen has taken a £7m H1 provision in relation to the extended liability period, and in July received a letter from UK Govt requesting it to commit to the Pledge as a mixed-use developer. It has contractual coverage and expects to recover any costs, but its initial assessment is this would involve a charge of £40-50m, before seeking recoveries. This has been recognised as a contingent liability in the H1 accounts.

[piedro] 09/8/2022 15:13

galeforce¹,

I'm not too bothered by the present decline in margins but if it were to continue
into the H2 results that would be worrying.

[galeforce1] 08/8/2022 08:13

Piedro - that's an interesting graph.
How serious do you think the decline in margins is?
The results looked good to me, although de-cladding is going to cost MGNS quite alot more than originally estimated.

[piedro] 02/8/2022 08:18

Morgan Sindall wins £61m Abergavenny super school job
hxxps://www.constructionenquirer.com/2022/08/02/morgan-sindall-wins-61m-abergavenny-super-school-job/

[galeforce1] 20/7/2022 13:31

Half-year results at MGNS on Thursday August 4th. Hopefully everything is continuing to tick along nicely.

We had a trading statement on May 5th which was cautiously optimistic about meeting the 2022 guidance (operating profit of £177m), so there should be no surprises in the H1 figures.

As usual, it is the comments on forward outlook, inflationary pressures, etc. that will be critical.

[woodyjmw] 20/5/2022 20:17

Seems harsh on MGNS, we’ll oversold, but probably won’t break its trend until we’re closer to peak interest rates and inflation. Better prospects in renewable energy and infrastructure, such as 3IN?

[galeforce1] 22/3/2022 08:14

Quite a gap up this morning.

Numis has published a research note with a target of £30.00. That might be the reason.

[galeforce1] 20/3/2022 22:53

I was looking at MGNS's medium term guidance and targets (page 35 of the Results presentation).

They are guiding to operating profits of:

Construction : £30m
Infrastructure £40m
Fit Out: £45m
Property Ser.: £15m
Part. Housing: £35m
Urban Regen.: £12m
Total: £177m

In 2021 total operating profit before Group costs was about £152m.

So in the medium term they see the operating profit £25m higher, which is pretty good.

How long is 'medium-term?

hxxps://www.morgansindall.com/assets/90cae5c3af/FY-2021-slides-FINAL-LR.pdf

[master rsi] 18/3/2022 23:29

Morgan Sindall Group disclosed a sale made by its finance director, to cover his tax bill after the exercise of a bonus award.

The FTSE 250 company said Steve Crummett acquired 12,612 shares at nil cost on Thursday, under its 2019 deferred bonus plan.

He subsequently sold 5,944 shares for 2,330p each, netting him £138,495.20 to forward to the tax man.

As a result of the exercise and sale, Morgan Sindall said Crummett’s total holding had increased by a net of 6,668 shares.

[galeforce1] 07/3/2022 12:43

Down to £20.50. Maybe a good day to buy some more?

There has be some impact on MGNS from higher energy prices. But this has to be a business that is only marginally impacted by a consumer slowdown.

[woodyjmw] 02/3/2022 17:43

Margin's are always low in construction and hence the low ratings of the businesses, but MGNS is pretty decent by industry standards. Nice graphs.

[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.