Morgan Sindall Group (LON:MGNS) used its latest earnings call to highlight what management described as another “good year,” extending a decade-long run of record profits in every year except the COVID period. Executives emphasized sustained growth, strong cash generation, and a rising level of forward workload visibility, while also acknowledging pockets of softer demand—particularly in London apartments—and a likely moderation in Fit Out performance after an exceptional year.
Ten-year performance and expanding workload visibility
Management said the group has delivered 10 years of strong performance, pointing to a 10-year PBTA compound annual growth rate (CAGR) of 18% and a dividend CAGR of 16%. The group’s secured order book and preferred bidder work were said to total about GBP 19.1 billion.
2025 financial results: revenue, margins, cash, and dividend
For 2025, the company reported revenue up 10% to just over GBP 5 billion and operating profit up 39%, with an operating margin of 4.5%. Adjusted profit before tax and amortization (PBTA) rose 35%, producing a PBTA margin of 4.6%. Adjusted EPS increased 33% to 370 pence.
Net cash improved by GBP 39 million to GBP 531 million, while profit-to-cash conversion was 87%. Operating cash flow was GBP 196 million, which management said was GBP 60 million higher than the prior year, after GBP 125 million of net investment in partnership activities.
The board announced a 20% increase in the full-year dividend to GBP 1.58 per share. Management also cited GBP 66 million of shareholder returns during the year, comprising the 2024 final dividend and the 2025 interim dividend.
On liquidity, management noted that closing net cash equated to roughly 10% of revenue, describing this as “key” to delivering the group’s future workload rather than framing it as a fixed comfort threshold. Average daily net cash was GBP 368 million in 2025 (with GBP 381 million in the second half), and management said it expects average net cash in excess of GBP 400 million in 2026 as it continues to pursue partnership opportunities.
Divisional performance: strength in Fit Out, resilient Partnerships, and Infrastructure investment cycle
Executives said Fit Out, Construction, Infrastructure, and Partnership Housing all contributed strongly, despite a weaker housing market. Mixed Use Partnerships posted an expected loss due to costs incurred ahead of schemes expected to start on site, and Property Services delivered a modest profit.
- Partnership Housing: Revenue increased 5% to GBP 903 million, with contracting revenue up 13% to GBP 638 million. Operating profit rose 16% to GBP 42 million (margin 4.7%). Average capital employed increased by about GBP 108 million to GBP 446 million, influenced by London schemes where capital remained “higher for longer” amid weaker apartment demand. The division ended the year with a secured order book of GBP 2.3 billion and preferred bidder work of GBP 2.8 billion. Management cited major public-sector awards, including a Cardiff Council partnership expected to deliver around 3,000 homes over the next decade and a recent appointment on a regeneration scheme expected to deliver around 3,500 homes over the next two decades.
- Mixed Use Partnerships (Muse): The division reported a GBP 5.3 million loss, attributed to investment in schemes planned to start on site in 2026 and the broader pipeline. The company said it ended 2025 with seven schemes on site and expects this to more than double to around 19 by end-2026. The secured development order book was GBP 4.6 billion (up 13%), plus GBP 1.7 billion at preferred bidder stage. Management said eight schemes moved from preferred bidder to signed development agreements during the year, and the division was appointed preferred bidder on eight additional schemes. Average capital employed rose to GBP 125 million, and management guided to GBP 125 million to GBP 140 million in 2026.
- Fit Out: Revenue rose 37% to GBP 1.8 billion, and profit increased 41% to a record GBP 140 million, producing a margin of 7.8%. Management cited volume growth, strong contract execution, and operating leverage. The division closed with a secured order book of GBP 1.3 billion and GBP 0.5 billion at preferred bidder stage (about GBP 1.8 billion of future work). Executives noted a changed competitive landscape following ISG’s collapse, saying Morgan Sindall picked up work aided by balance sheet strength. However, management warned it expects Fit Out turnover and profit to reduce, and said gross margin is expected to be lower due to project mix.
- Construction: Revenue increased 11% to GBP 1.2 billion, and operating profit increased 20% to GBP 37 million, with a 3.2% margin, described as mid-range versus targets. The public sector accounted for around 85% of revenue, with education the largest served sector. Management said the division was reappointed to the Department for Education framework. The secured order book was GBP 1.1 billion, plus GBP 1.5 billion at preferred bidder stage, totaling GBP 2.6 billion (up 20% year over year).
- Infrastructure: Revenue declined 11% to GBP 935 million, reflecting a planned shift toward early planning and design work following major framework wins. Operating profit dipped 3% to GBP 37.2 million, while margin improved 30 basis points to 4%. The division won over GBP 2 billion of new work in 2025, largely in energy and nuclear, building on roughly GBP 2.5 billion of work won in 2024. Management referenced frameworks including Sellafield IDP and National Grid’s Electricity Transmission Partnership Framework. The year-end secured order book was GBP 1.9 billion, with GBP 700 million at preferred bidder stage.
Property Services reported GBP 2 million of profit and was integrated into the Construction division as of 1 January 2026, which management said would be the last time Property Services is reported as a standalone segment.
Targets and 2026 outlook
Management said it increased medium-term targets for Mixed Use Partnerships and Infrastructure, citing higher levels of incoming work. In Q&A, executives said Muse’s higher target return on capital reflected improved expected ROCE on newly won schemes compared with past projects. For Infrastructure, management said the uplift in the revenue target was driven largely by energy-sector growth, while noting margin targets had been reviewed recently and would not be adjusted frequently.
For 2026, the company outlined expectations by division:
- Partnerships: solid profit growth expected, with ROCE similar to 2025; management noted the outcome will depend materially on housing market conditions.
- Mixed Use Partnerships: more projects expected to move on site, but management anticipates only a modest profit and low ROCE due to the ramp-up profile and upfront overhead.
- Fit Out: profits expected to be “significantly ahead” of the medium-term target range for 2026, though management also indicated turnover, profit, and gross margin are expected to be lower than 2025 due to project mix and a market that may not grow significantly over the next two to three years.
- Construction: margin expected to be mid-range, with revenue “towards” GBP 1.3 billion.
- Infrastructure: margin expected to be mid-range, with revenue “towards” GBP 1 billion.
On London exposure, management said slower sales have led to capital being “higher for longer” in both Partnership Housing and Mixed Use, but stated it was not concerned and expects capital to turn in the near-to-medium term. Executives estimated London investment of roughly GBP 100 million to GBP 150 million across in-progress and completed stock, adding that strong liquidity avoids the need for forced sales. The company also said it has recognized that taking large residential schemes with sales risk—particularly apartments—is “probably not for us.”
In closing remarks, management said the group’s long-term organic growth strategy remains unchanged and reiterated that it is on track to deliver 2026 results in line with its revised expectations set out in the trading update released on 12 February.
About Morgan Sindall Group (LON:MGNS)
Morgan Sindall Group plc, the Partnerships, Fit Out and Construction Services Group, reported an annual revenue of £4.5bn in the full year 2024. The Group employs over 8,000 employees and operates in the public, regulated and private sectors. It reports through six divisions of Partnership Housing, Mixed Use Partnerships, Fit Out, Construction, Infrastructure and Property Services.
