Morgan Sindall Group delivered a strong performance in 2023 against a difficult market backdrop. The results were another record for the Group and reflected the strength and breadth of the Group’s operations and the talent and commitment of its people.
Group revenue increased by 14% to over £4.1bn, while adjusted operating profit before tax was up 6% to £144.6m. The Group’s balance sheet remains strong with net cash of £461m, and its high-quality secured order book of £8.9bn, up 5% on the prior year leaves the Group well-positioned for the future and on track to deliver a result for 2024 in line with its current expectations.
In 2023, Infrastructure reported a strong year of profit and margin growth, driven by the timing and nature of projects delivered through its frameworks, and by high-quality operational delivery across the business. Revenue was 15% higher at £887m (FY 2022 : £768m) with operating profit of £38.5m, 31% higher than the prior year (FY 2022: £29.5m), resulting in an operating margin of 4.3% (FY 2022: 3.8%).
This was well ahead of the top end of its targeted range for its operating margin of 3.5%-4.0%.
The order book at the year end was £1,689m, down 6% on the previous year end (FY 2022: £1,799m). As in previous years, in excess of 95% of the value of the order book is derived through frameworks, consistent with the strategic focus on long-term workstreams from its clients.
"Following our robust half-year results in 2023, I am pleased that Morgan Sindall Infrastructure has had a very strong finish to the year and continues to contribute significantly to Morgan Sindall Group plc’s results, reflecting the hard-work, dedication and collaboration from our teams.
"The landscape of infrastructure delivery continues to evolve and we have increased our agility to organically grow towards higher value delivery. As our demands on our daily infrastructure change and we work differently to reduce carbon output, enhance our communities and protect the health, safety and wellbeing of everyone connected with our business; we wouldn’t achieve any of this without our people, supply chain family and the collaboration with wider stakeholders. Teams I am proud of and that build Morgan Sindall Infrastructure."
Sector overview
Temporary traffic management during the A11 works - Concrete Roads Framework
In Highways, Infrastructure was awarded a project by Oxfordshire County Council to replace Kennington Railway Bridge on the A423 Southern Bypass. The division started work during the year on a £66m A12 project in Essex and completed its A11 works in Norwich, both part of National Highway’s Concrete Roads Programme - Reconstruction Works Framework, a four-year, c£130m programme to repair or replace the concrete surface of motorways and major A roads in England. Work continued on safety-critical works for National Highways to upgrade the M40-M42 interchange, as part of the original Smart Motorways Alliance.
Parsons Tunnel during construction - South West Rail Resilience Programme
In Rail, the division began work on an £88m project to extend Beckton Depot and a £40m project to upgrade Surrey Quays station. Both projects were awarded by Transport for London via its London Rail Infrastructure Improvement Framework. In addition, Transport for London appointed Infrastructure to upgrade Colindale station with a new ticket hall and step-free access and to conduct feasibility studies for providing step-free access to the next tranche of stations. Work continued on several schemes for Network Rail, including the Bangor to Colwyn Bay signalling power upgrade, as part of the CP6 Wales and Western framework, the lift scheme at Liverpool Central Station as part of the Mersey Rail framework, and the Northumberland Line extension project. Work completed on the £48m Parsons Tunnel rockfall shelter extension, delivered for Network Rail under the South West Rail Resilience Programme. Infrastructure was awarded a position on the CP7 Wales and Western Framework, a £2bn programme to be implemented over the next eight years.
In Nuclear, decommissioning works continued for Sellafield on the Infrastructure Strategic Alliance and on the £1.6bn Programme and Project Partners contract. In addition, work progressed on the 10-year Clyde Commercial Framework for the Defence Infrastructure Organisation and on the D58 facility for BAE Systems.
Sellafield Ltd project - Programme and Project Partners (PPP)
In Energy, work continued on the Dinorwig, Wales and ZZA, Sunderland projects as part of the RIIO-2 electricity construction EPC (Engineer, Procure and Construct) framework for National Grid. The division also progressed several schemes under Scottish & Southern Electricity Network’s (SSEN) RIIO-2 framework for the construction, refurbishment and decommissioning of overhead lines, underground cable systems and substations operating between 33kV to 400kV across SSEN’s transmission network. Work completed on the Peak District East Vision Impact Provision scheme for National Grid.
In Water, work continued on various environmental improvement projects and wastewater treatment upgrades as part of the long-term AMP7 framework with Welsh Water. In addition, civil engineering works continued on the west section of the Thames Tideway ‘super sewer’ project to help prevent pollution in the Thames.