Morgan Sindall sets record first-half performance

Morgan Sindall Group has reported record first-half results, with revenue rising to £2.56 billion and adjusted operating profit reaching £111.5 million.

Revenue increased by 8% during the six months to 30 June 2026, while adjusted operating profit rose by 21%. Adjusted profit before tax reached £116.1 million, and adjusted earnings per share increased to 186.1p.

The group ended the period with net cash of £418 million and reported average daily net cash of £423 million. Its interim dividend increased by 10% to 55p per share.

A secured order book of £12.23 billion stood 2% above the year-end position, while a further £7.3 billion of work had reached preferred-bidder status. The combined visible pipeline therefore extended to approximately £19.5 billion.

Fit Out remained the largest contributor to profitability, with revenue increasing by 19% to £996 million and operating profit reaching £69.1 million. The division maintained an operating margin of 6.9%, although its order book reduced by 8% to £1.33 billion.

Construction revenue grew by 18% to £742 million, while operating profit increased by 47% to £24.4 million. The division’s margin rose from 2.6% to 3.3%, and its order book remained broadly stable at £1.9 billion.

Infrastructure recorded revenue of £468 million and operating profit of £18.3 million, producing a 3.9% margin. Partnership Housing revenue declined to £347 million, although operating profit held at £13.2 million as the division worked through a more subdued residential market.

Morgan Sindall has raised its medium-term expectations for Fit Out, targeting annual operating profit of between £100 million and £130 million. The group has also increased Construction’s medium-term operating-margin target to between 3.5% and 4%.

Office refurbishment and fit-out continue to underpin the strongest part of the business. Employers are investing in higher-quality workplaces, improved energy performance, flexible layouts, digital infrastructure, amenities, and buildings capable of supporting changing occupancy patterns.

That demand has remained comparatively resilient while new commercial development has faced higher finance costs and slower investment decisions. Existing buildings can often be returned to competitive use faster than new schemes can pass through land acquisition, planning, finance, demolition, and full construction.

Repair, refurbishment, and adaptation are carrying a growing share of construction activity, although fit-out work still demands careful control of programme, design development, access, and client change. Projects are frequently delivered in occupied buildings or against fixed lease and relocation dates, leaving limited room for delay.

Margins in mainstream construction remain much lower than those achieved in fit-out. Morgan Sindall’s improvement is nevertheless notable in a sector where design uncertainty, inflation, subcontractor failure, and programme extension can consume a project’s return quickly.

Contract selection, operational controls, and risk management have supported that result more effectively than growth pursued without regard to commercial quality. Esh Group’s record performance after tighter contract selection reflected a similar connection between workload quality, investment, and financial resilience among regional contractors.

Morgan Sindall’s cash position provides an additional buffer. High reported revenue does not guarantee liquidity, particularly where clients delay certification, retentions accumulate, or contractors finance substantial work before payment.

Strong average daily cash suggests that the period-end figure is not dependent on a temporary working-capital movement. That position supports bonding, acquisitions, investment, supply-chain confidence, and the group’s ability to withstand individual project setbacks.

The contrast between individual contractor performance and the wider market remains pronounced. New orders and starts have weakened in several sectors, while material and labour costs continue to shift.

Tender-price forecasts are holding despite softer activity, creating pressure on businesses that bid aggressively for a thinner pool of work. Strong contractors can preserve discipline, while companies with weaker balance sheets may accept risk to maintain turnover.

Morgan Sindall’s order book offers scale and visibility, although delivery risk remains. Preferred-bidder work must still convert into contracts, and secured projects must be completed without allowing inflation, design change, or supply-chain weakness to dilute margin.

The group’s exposure to public buildings, schools, healthcare, defence, energy, transport, regeneration, housing partnerships, and commercial refurbishment provides several routes to growth. Each market moves through a different investment cycle, reducing reliance on one source of demand.

Diversification still requires selective bidding. A large pipeline can create pressure to recruit, reserve subcontractor capacity, and invest ahead of final award, while divisions competing for growth may be tempted to soften commercial thresholds.

Labour availability will remain a constraint as workload increases. Experienced project managers, commercial staff, design managers, building-services specialists, and planners are difficult to replace, and rapid expansion can weaken supervision if recruitment outpaces development.

The first-half figures place Morgan Sindall among the strongest performers in UK construction. Preserving that position will require the group to maintain cash conversion and contract discipline as fit-out demand develops, infrastructure programmes accelerate unevenly, and competitors respond with increasingly assertive pricing.