Intense competition hits profits at Morgan Sindall

Graham Shennan, managing director of Morgan SindallGraham Shennan, managing director of Morgan Sindall
Graham Shennan, managing director of Morgan Sindall
Construction company Morgan Sindall reported a 34 per cent slide in annual profits after margins were hit by competition across its construction, infrastructure and affordable housing divisions.

The firm, which has major operations across Yorkshire and offices in Leeds and Hull, said its construction and infrastructure division, which accounts for more than half of total revenue, experienced challenging market conditions throughout the year, which had a significant impact on overall profits.

Morgan Sindall competes with Kier Group, Carillion and Interserve in the construction and infrastructure business.

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The group’s adjusted pre-tax profits fell to £31.3m in the year to December 31.

The company said that its Leeds office is on site at an £8m development on the former site of Queen’s Hall on Sovereign Street in Leeds city centre. The 61,000 sq ft scheme will be occupied by KPMG as its Yorkshire headquarters when it is completed in 2015.

The Leeds office also won a £1.9m contract to extend the White Rose Shopping Centre in the south of Leeds. The project for Land Securities will involve expanding the existing facilities to make way for additional shops.

The company is also carrying out a £19.2m project at St Mary’s College, Hull campus. The works involve the construction of a highly specialised new 70,000 sq ft teaching block and are due for completion this summer.

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The firm has completed a £6.7m major extension to Europe’s largest soft drinks factory for Coca-Cola Enterprises in Wakefield as part of a £30m investment in the site.

In early 2013, Morgan Sindall handed over Andrew Marvell College, Kingswood Academy and Oakfield Special School, worth a combined total of £64.5m, as part of Hull City Council’s £400m Building Schools for the Future programme. All three school buildings feature state-of-the-art technology.

Morgan Sindall’s tunnelling business is working with Yorkshire Water Services at sites in Bridlington and Scarborough to improve the bathing water quality as part of the Yorkshire Water Framework joint venture.

The Bridlington and Scarborough projects, worth around £22m and £26m to the joint venture respectively, include the construction of two new combined sewer overflow chambers and an 800 metre-long, two metre diameter storm water tunnel at Bridlington.

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In December, the tunnel boring machine successfully completed its 800-metre drive and broke through into the reception shaft on Bridlington’s seafront after 10 months underground.

Graham Shennan, managing director of Morgan Sindall, said: “2013 was a busy year for Morgan Sindall despite challenging market conditions. We enter 2014 with a strong order book.”