Morgan Sindall Group PLC delivered a record set of results on Thursday, as the construction sector recovered from Covid-related disruption.

The London-based infrastructure construction company said profit before tax doubled to £129.8 million in 2021 from £60.8 million the year before. Earnings per share were similarly doubled to 212.4 pence from 99.8p.

Revenue for the year rose by 5.8% to £3.21 billion from £3.03 billion in 2020, and by 4.6% from the pre-pandemic comparative of £3.07 billion in 2019.

Operating margin also increased to 4.1%, up 180 basis points from the prior year’s margin of 2.3%, and up 110 basis points from 2019’s margin of 3.0%. Despite a 7% drop in Construction & Infrastructure revenue, operating profit grew by 63% over the past year thanks to the improved margin.

Morgan Sindall said better operational delivery, ‘disciplined contract selectivity’, risk management, and a favourable project mix were behind its increased margin.

The final dividend was increased by 55% to 62.0p per share from 40.0p in 2020. The total dividend for 2021 was up 51% year-on-year to 92p, from 61.0p. This represents a dividend cover of 2.46 times.

Morgan Sindall’s share price was up 3.9% to 2,232.88 pence each in London on Thursday morning.

Reflecting its strong performance in 2021, Morgan Sindall has increased targets for some divisions. Revenue over £1 billion is now targeted in Construction and Infrastructure divisions, having achieved £694 million and £826 million in 2021 respectively. The company expects to finish 2022 ‘slightly above’ its previous expectations.

Chief Executive John Morgan commented: ‘The group is in its best shape ever. Our strategic focus on construction and regeneration is driving positive momentum across the group and is enabling us to upgrade our divisional medium-term targets today which provide the framework for our next stage of growth.

‘Underpinning these targets is our commitment to maintaining a strong balance sheet at all times and to hold a substantial net cash position. This continues to allow us to make the right long-term decisions for the business.’

Net cash at year-end was £358 million, up from £333 million in 2020, and £193 million in 2019.

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