Morgan Sindall Group Plc, a U.K. construction and refurbishment company, said first-half profit climbed 14 percent as affordable housing revenue was boosted by an acquisition and it reduced its share of public-sector work.
Net income rose to 14.9 million pounds ($24.5 million), from 13.1 million pounds a year earlier, the London-based company said in a statement today. Revenue advanced 11 percent to 1.09 billion pounds. Pretax profit dropped 9 percent to 16.7 million pounds as “challenging” market conditions affected margins.
Morgan Sindall bought Connaught’s maintenance business out of administration last year, helping to boost revenue for its affordable housing unit 32 percent to 228 million pounds. The company also reduced the effect of government spending cuts by reducing its share of public-sector work, which now accounts for 50 percent of business, compared with 60 percent a year earlier.
In February, Chairman John Morgan said the company expected the private sector “to pick up some of the slack” from spending cuts.
“In the last few downturns we’ve increased our market share and we expect to do the same this time,” Morgan said in a phone interview today. “Our biggest challenge at the moment is how do we make the most of this so that we can look back in four years time and say we had a good recession. Margins are very tough but we’re in a strong place”
Morgan Sindall shares slipped 0.9 percent to 612 pence as of 11:34 a.m. in London. The stock has dropped 13 percent this year, giving the company a market value of 264.3 million pounds.