Morgan Sindall Group Plc, a U.K. based construction and regeneration company, said profit fell 9.4 percent last year on one-time charges and lower revenue that resulted from government spending cuts.
Net income dropped to 29.9 million pounds ($48.3 million), or 69.1 pence a share, from 33 million pounds, or 77.1 pence, in 2009, the London-based company said in a statement today. Revenue fell 5 percent to 2.1 billion pounds.
“We think the private sector is going to pick up some of the slack” from the spending cuts, Chairman John Morgan said in a telephone interview. “It is doing a little better than expected, there is a little more confidence in the economy.”
Morgan Sindall expects the construction market to weaken for the next three years as the U.K. government cuts spending plans to deal with a record budget deficit caused by the biggest recession since World War II. Profit margins will come under pressure in 2011 as “too many” companies compete for less business, Morgan said.
The company’s order book at the start of the year rose 13 percent to 3.6 billion pounds, according to the statement.
Morgan Sindall bought Connaught Plc’s maintenance business out of administration last year and has since made 800 workers redundant, he said. The acquisition was “transformational” for the company’s Lovell unit, Morgan said.
The fitting-out business would “go back” this year because of a shortage of new offices being completed, he said.
The shares fell 1 penny to 715 pence at 8:28 a.m. in London trading. The stock has risen 30 percent in the past six months.