Construction group says performance has hit expectations despite 鈥渦pward pressure鈥� on supply chain

Construction group Morgan Sindall has said it has performed in line with expectations since its half year results in June despite 鈥渦pward pressure on material costs and subcontractor costs.鈥�

The firm said it had seen no significant change in market conditions in the third quarter of the calendar year, though 鈥渕argin contraction鈥� in its construction arm is likely to impact upon its group-wide profit margin.

It said it had seen 鈥渆arly indications of increasing confidence of market improvement through 2014 and beyond鈥� in its fit-out division, and that rising subcontractor costs for its construction arm would provide 鈥渁dditional management challenges.鈥�

Likewise it said a rising market for its housing arm, Lovell, which saw a 41% increase in open market sales, was being offset by 鈥渟ignificant competitive pressure on construction revenue and margins, exacerbated by increasing material costs and subcontractor costs.鈥�

It reported strong performance in its urban regeneration arm, Muse, and said it had improved average daily net debt from 拢32m in the first half of the year to 拢13m in the third quarter.

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