Morgan Sindall Group (MGNS) is a UK-based construction and regeneration company operating in six divisions, including Construction, Infrastructure, and Fit Out, focusing on various sectors such as education, healthcare, and highways.

Its Property Services division offers maintenance for social housing, while the Partnership Housing division delivers mixed-tenure housing projects. The Urban Regeneration division collaborates with landowners and public partners to revitalise urban areas.


Rationale

Morgan Sindall Group drew our attention after achieving record full-year results in 2023, showcasing resilience in the face of market challenges. Despite headwinds, the company reported a notable 6% increase in adjusted pre-tax profit to £144.6m, accompanied by a 14% growth in revenue to £4.1bn. Particularly commendable was the exceptional performance of the Fit Out business, which experienced a remarkable 38% surge in operating profit to £71.8m, highlighting the strength and adaptability of Morgan Sindall's operations. We also love that it has achieved 5 consecutive years of total revenue growth. 

While the construction segment also demonstrated commendable growth, with operating profit rising by 15% to £25.9m, the property services division encountered operational obstacles, resulting in an operating loss of £16.8m. Despite these challenges, Chief Executive John Morgan expressed confidence in the company's diversified operations and capabilities, positioning them well to navigate uncertainties and capitalise on opportunities in the market. Additionally, they pay a generous dividend of 4.97%.

Looking ahead, we believe Morgan Sindall are on track to continue growing in 2024. Fuelled by reduced inflation and the prospect of lower interest rates, Morgan Sindall anticipates delivering excellent 2024 results, in line with current expectations.