Morgan Sindall Group Plc · LSE:MGNS
Morgan Sindall — FY2024 Earnings Presentation
42 slides from Morgan Sindall's earnings presentation, Feb 26, 2025
Slide 1: Full Year 2024 Results Presentation
Full Year 2024 Results Presentation to 31st December 2024 26th February 2025
Slide 2: Agenda
Agenda • Group highlights – John Morgan • Financial & operational review – Kelly Gangotra • Mixed Use Partnerships (MUSE) – John Morgan • Markets & outlook – John Morgan • Q&A Full Year Results 2024 Page 2
Slide 3: Group Highlights
Group Highlights Record 2024 performance £4.5bn Group revenue +10% PBT margin increase 30 bps to 3.8% High-quality secured order book of £11.4bn, +28% £172.5m +19% Balance sheet strength and significant daily cash Adjusted profit before tax Decentralised and empowered culture gives us tran
Slide 4: The Partnerships, Fit Out and Construction Services Group
The Partnerships, Fit Out and Construction Services Group Full Year Results 2024 Page 4
Slide 5: Financial & operational review
Financial & operational review Kelly Gangotra
Slide 6: Summary of Group results
Summary of Group results Adjusted1 basis £m FY 24 FY 23 Change Revenue 4,546 4,118 +10% Operating profit 162.6 141.3 +15% Operating margin 3.6% 3.4% +20bps Net interest 9.9 3.3 +200% Profit before tax 172.5 144.6 +19% Tax (42.0) (29.9) +41% Profit after tax 130.5 114.7 +14% Earnings per share 278.8p
Slide 7: Summary by division
Summary by division Operating Operating Revenue Profit/(Loss)1 Margin1 £m change £m change % change Partnership Housing 861 +3% 36.1 +18% 4.2% +60bps Mixed Use Partnerships 91 -51% 1.5 -90% n/a n/a Fit Out 1,300 +18% 99.0 +38% 7.6% +110bps Construction 1,044 +8% 30.9 +19% 3.0% +30bps Infrastructure
Slide 8: Secured Order Book and Preferred Bidder
Secured Order Book and Preferred Bidder Group secured Preferred Total secured and order book bidder preferred bidder Partnerships £6.3bn £2.6bn £8.9bn (+62% FY 2023) (-30% FY 2023) (+16% FY 2023) Fit Out £1.4bn £0.4bn £1.8bn (+31% FY 2023) (+131% FY 2023) (+43% FY 2023) Construction Services £3.7bn
Slide 9: Operating cash flow
Operating cash flow • Operating cash inflow of £134.8m £66.6m £33.9m • Net working capital outflow of £34m £162.6m reflects: (£42.1m) £14.2m £134.8m Investment in partnership housing (£100.4m) Supported by negative working capital contribution in Construction, Infrastructure & Fit Out • Conversi
Slide 10: Daily net cash balance
Daily net cash balance MAX: £540m • Average daily net cash of £374m 600 550 (FY 2023: £282m) 500 450 • Year end net cash of £492m 400 350 300 (FY 2023: £461m) 250 200 150 MIN: £293m • FY 2025 average daily net cash 100 expected to be in excess of £330m 50 - £m 1 Jan 30 Jun 31 Dec (50) (100) (150) (2
Slide 11: Capital allocation framework
Capital allocation framework Overarching principle to hold significant net cash balances at all times Cash generation Maximise Ordinary Bolt-on Special returns and maintain organic returns to acquisitions to to strong balance expansion in shareholders. accelerate shareholders, sheet Partnership Divi
Slide 12: ESG Commitments & Progress
ESG Commitments & Progress MSCI ‘AAA’ ESG Rating and CDP score of ‘A’ for Environment leadership in climate On track to achieve 2030 science-based Scopes 1 and 2 Environment emissions reduction targets 98% of invoices were paid within 60 days Suppliers > 90% of projects were accident and RIDDOR free
Slide 13: Divisional performance
Divisional performance
Slide 14: Partnership Housing
Partnership Housing £m FY 24 Change Revenue 861 +3% 1,808 mixed-tenure units Operating profit 36.1 +18% completed3 (FY 2023: 1,923) Inc. 874 open market sales, 5% higher (FY 2023: 830) Operating margin 4.2% +60bps Secured order book 2,174 +7% £237k ASP of mixed-tenure Average capital employed1– last
Slide 15: Mixed Use Partnerships
Mixed Use Partnerships £m FY 24 Change Revenue 91 -51% £94.4m capital employed at year end (£14.7m higher than Operating profit1 1.5 -90% prior year) Secured order book 4,085 +124% c£105m - £115m average Average capital employed2 – last 12 months 86.9 -£11.7m capital employed for FY 2025 ROCE2 – las
Slide 16: Fit Out
Fit Out £m FY 24 Change Revenue 1,300 +18% Commercial offices Operating profit 99 +38% 86% of revenue Operating margin 7.6% +110bps Secured order book 1,439 +31% London Region 72% of revenue • Another record result, driven through project delivery and focus on customer experience ‘Traditional’ Fit O
Slide 17: Construction
Construction £m FY 24 Change By revenue Revenue 1,044 +8% 15% Operating profit1 30.9 +19% Operating margin1 3.0% +30bps 85% Secured order book 952 +20% Public Sector Private Sector • Market is stable £1bn secured order book plus £1.2bn at preferred bidder stage provides visible pipeline of c.£2.2b
Slide 18: Property Services
Property Services £m FY 24 Change Revenue 223 +21% Long-term order book Operating profit1 (17.8) -6% 78% by value for 2026+ Operating margin1 -8.0% +110bps Secured order book 887 -40% • Remediation programme now fully implemented, which included the following areas: New management team fully embed
Slide 19: Infrastructure
Infrastructure £m FY 24 Change By revenue Revenue 1,047 +18% 14% Operating profit 38.5 Operating margin 3.7% -60bps Secured order book 1,883 +11% 86% Infrastructure Services Design • Project type and phasing of workload driving revenue and margin growth • Good growth in defence, energy and nuclear •
Slide 20: Mixed Use Partnerships
Mixed Use Partnerships John Morgan
Slide 21: MUSE at a glance
MUSE at a glance • Long-term place making / multi-phased mixed use developments • MUSE is a national business • Every project is in partnership • Profit from share of equity and development management fees • Majority of projects forward funded • Development order book up 124% to £4.1bn Full Year Res
Slide 22: Current partnerships
Current partnerships Full Year Results 2024 Page 22
Slide 23: MUSE order book and preferred bidder
MUSE order book and preferred bidder Preferred Bidder converted to New Preferred New Preferred contracted Bidders Bidders development in 2024 in 2025 to date +124% agreements in 2024 on FY 2023 £4.1bn • Bradford • Northampton • Hull • Arden Cross (Midlands) • Wythenshawe • Wakefield Secured orderboo
Slide 24: Salford Central 2010 Salford Central 2024
Salford Central 2010 Salford Central 2024 • ECF scheme in partnership with Salford city council • Mixed use development, hotel, multi-story car parks • Development commenced in 2013 and expected to complete 2028 • , 2.2 Million sq ft of commercial space and 1,000 homes
Slide 25: St Helens
St Helens • 20-year borough wide multi-phase partnership • First phase, new bus station, market hall, offices and residential in the town centre • Commenced 2024, completion due 2028
Slide 26: Arden Cross
Arden Cross • 30-year development agreement to develop 140 acres around the new HS2 station • When complete commercial space expected • Early works to include Health Tec campus in to employ 27,000 people partnership with Warwick university. • Development to include 3,000 new homes. Preferred Final p
Slide 27: MUSE summary
MUSE summary • Very strong track record of delivery • Similar to fit out in some ways • Market leaders in specialist market • Strong balance sheet fundamental • Very bespoke skills developed over time • Long-term profit streams • Investing for growth Full Year Results 2024 Page 27
Slide 28: Markets and outlook
Markets and outlook John Morgan
Slide 29: 2025 Medium-term targets
2025 Medium-term targets Operating margin of 8%, ROCE up towards 25% Partnership Housing (Unchanged) Annual ROCE up towards 25% Mixed Use Partnerships (previously rolling 3-yr average ROCE up towards 20%) Annual operating profit £60m - £85m Fit Out (previously £50m - £70m) Operating margin of 3.0% -
Slide 30: 2025 Outlook by division
2025 Outlook by division Expect solid profit growth, ROCE in line with 2024 levels as we continue to Partnership Housing invest Modest profits over the next two years, ROCE expected to be low single Mixed Use Partnerships digit Fit Out Expect profit to be towards the top end of revised range Constru
Slide 31: Summary
Summary • Strong momentum for the Group • Continuing strong organic growth • Substantial growth in order book • Importance of strong balance sheet and holding substantial net cash balance at all times • Increased medium-term targets for four out of six divisions • On track to deliver an outcome for
Slide 32: Questions
MORGAN SINDALL GROUP
Slide 33: Appendices
MORGAN SINDALL GROUP
Slide 34: Net Finance Income
Net Finance Income £m FY 24 FY 23 Interest income on bank deposits 17.4 10.8 Interest receivable from joint ventures 0.8 - Loan arrangement and commitment fees (2.2) (2.0) Interest expense on lease liabilities (IFRS 16) (3.8) (2.5) Other (2.3) (3.0) Total net interest income 9.9 3.3 Full Year Result
Slide 35: Tax
Tax £m FY 24 FY 23 Profit before tax 171.9 143.9 Less: share of underlying1 net profits from JVs (4.5) (14.1) Profit subject to tax 167.4 129.6 Statutory tax rate 25.0% 23.5% Current tax charge at statutory rate (41.9) (30.5) Tax on underlying1 joint venture profits2 (1.5) (2.6) Tax on exceptional i
Slide 36: Adjusted earnings per share
Adjusted earnings per share £m FY 24 FY 23 Profit after tax 131.7 117.7 Adjusted for: Exceptional operating items 0.1 (2.2) Amortisation of intangible assets 0.5 2.9 Tax relating to the above items (1.8) (3.7) Adjusted earnings 130.5 114.7 Basic weighted average number of shares 46.8m 46.3m Adjusted
Slide 37: Payment practices
Payment practices 6 months to 31st December 2024 Invoices not Average time to Invoices paid paid with pay invoices within 60 days agreed terms Construction & Infrastructure1 25 days 3% 98% - 1% - Fit Out 19 days 5% 98% 1 day 1% 1% Property Services 38 days 5% 99% 3 days 3% - Partnership Housing 31 d
Slide 38: Net cash movement
Net cash movement Year end net cash of £492.4m £107.0m £492.4m £460.7m (£56.1m) (£19.2m) Operating cash flow (Slide 9) £134.8m Tax (£43.9m) Interest (non-JV) £16.1m Free cash flow (A) £107.0m Opening A B C Closing net net cash cash A = Free cash flow. See table B = Dividends C = Other. Includes the
Slide 39: Summary balance sheet
Summary balance sheet £m 31 Dec 24 31 Dec 23 Intangibles 218.1 218.6 PP&E 95.1 86.0 Investments (including JVs)1 112.5 107.4 Net working capital2 (104.9) (136.0) Current and deferred tax 4.5 (10.6) Net cash 492.4 460.7 Lease liabilities (66.7) (63.8) Provisions1 (105.5) (96.1) Other3 1.8 1.9 Net ass
Slide 40: Provisions
Provisions Building £m Total Other Safety Provisions as at 31 December 2023 96.1 56.1 40.0 Additions 38.8 11.9 26.9 Utilised (16.2) (7.3) (8.9) Released (13.2) (3.9) (9.3) Provisions as at 31 December 2024 105.5 56.8 48.7 Full Year Results 2024 Page 40
Slide 41: Capital Employed - Partnerships
Capital Employed - Partnerships £m Total Partnership Mixed Use Partnerships Housing Partnerships Total net land & Partnership WIP 395.7 327.2 68.5 Unsold completed units (excl. joint ventures) 34.0 29.0 5.0 Amounts invested in joint ventures1 118.8 76.6 42.2 Shared equity loans and investment proper
Slide 42: MORGAN
MORGAN SINDALL GROUP