Shares of British construction firm Morgan Sindall Group PLC (LON: MGNS) gapped 9% higher after reporting that it accumulated massive cash reserves in 2020 despite the pandemic lockdowns causing its profits to fall by almost a third.
The company’s cash reserves rose to £333 million compared to the £193 million recorded in 2019. The firm still managed to settle its supply invoices within an average of 27 days, one of the best turnaround times in the construction industry.
Morgan Sindall revealed that its order book currently stood at £8 billion, which will keep it busy throughout the year compared to last year’s total revenues of £3 billion. The firm’s profits fell 31% to £60.8 million compared to 2019’s £88.6 million.
Ready to put what you’ve learned into practice?
Try IG’s platform with £10,000 in virtual funds and practise trading
without putting your own money at risk.
Try IG with a demo account →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Learn the markets with IG Academy
Build your knowledge with IG Academy educational content, then use a
demo account to practise what you’ve learned on the IG platform.
Explore IG →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
See how trading works before risking real money
IG’s demo gives you access to thousands of markets and £10,000 in
virtual funds, so you can explore the platform and test your ideas first.
Open an IG demo →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Turn trading theory into practical experience
Learn with IG Academy, explore charts and market tools, and practise
strategies in a simulated trading environment before going live.
Start practising with IG →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Ready to take your learning further?
IG combines market education, analysis and an established trading platform,
giving you the tools to keep learning as you develop your trading skills.
Discover IG →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
The firm’s profits were higher than expected after its latest guidance issued on November 4, 2020, raised its upper-profit range to £60 million. The company benefitted from the British government allowing construction activities to continue during the lockdown period.
Investors also cheered the company move to reinstate its dividend payout and also repaid £9.5 million it received from the Government as furlough cash at the height of the pandemic lockdowns.
Morgan Sindall’s CEO, John Morgan, said: “While the year has been dominated by the Covid-19 pandemic, these results reflect the resilience across the group and the benefits of actions taken in recent years to maintain contract selectivity, further improve payments to our supply chain and maintain a strong cash position at all times.”
Adding:
“The size and quality of our growing secured workload at well over £8bn leave us well-positioned for the future, and we are on track to deliver a result which is materially ahead of our previous expectations and slightly ahead of that delivered in 2019.”
Morgan Sindall shares price.
Morgan Sindall shares gapped 12.9% higher to trade at 1680p after rising from Wednesday’s closing price of 1488p.
