Mark Cutler
Managing Director, Infrastructure Services
The division continues to benefit from a strong market.
Revenue increased by 39% in 2008 to £799m (2007: £575m), largely due to the full year impact of the July 2007 acquisition. Operating profit increased by 36% to reach £14.4m (2007: £10.6m). Margin was maintained at 1.8% (2007: 1.8%). The operating profit is also stated after one-off IT costs relating to the acquisition of £1.4m (2007: £1.4m) which will not recur in 2009. Adjusting the operating profit for these costs gives a margin of 2.0% (2007: 2.1%).
The division continues to benefit from a strong market which underpinned a record year in 2008. The division expanded by more than a third through growth in the transport, water and energy sectors and through the full year impact of the July 2007 acquisition.
There were significant project successes in 2008, including the completion of a new London Underground Station at Shepherd’s Bush, the opening of the DLR Woolwich Arsenal Extension valued at £180m and the £120m Kincardine Crossing in Scotland, a project which was technically complex and environmentally challenging. The division is also increasingly working with other divisions within Morgan Sindall, such as Morgan Ashurst on RAF Valley and Paddington Station.
Key long-term frameworks were secured during the year including the Vendor Capital Programme for London Underground. Growing experience in delivering energy projects, including the wind farms at Clachan Flats in Scotland and the biomass plants at Drax and Longannet, creates substantial opportunities for future growth. The division will seek to secure and renew frameworks and contracts in the energy and water sectors for the next regulated period.
The forward order book stands at £1.4bn (2007: £1.7bn) and the division is currently bidding a number of major infrastructure projects. The division’s diverse and numerous opportunities provide an exciting outlook for 2009 and beyond. In the short-term it sees further opportunities in the transport, water and energy sectors. In the medium-term it is positioning itself in anticipation of new opportunities in both the nuclear and traditional power generation sectors and the defence sector which offer significant expansion opportunities.
The division
Morgan Est is one of the UK’s leading providers of integrated infrastructure services. The division has five business units which work together to provide integrated solutions across the transport, water and energy sectors, as follows:
- Infrastructure Projects, specialising in the design and delivery of complex projects in the road, water and energy sectors
- Utility Services, maintaining utility networks in the water, gas and electricity sectors
- Capital Projects, specialising in the design and delivery of complex projects in the air and rail sectors
- Tunnelling Services, the UK’s leading tunnelling contractor
- Programme Management Services, offering project, programme and integration management consultancy services for customers through the entire life cycle of large capital investment programmes.
| 2008 | 2007 | |
|---|---|---|
| Revenue | £799m | £575m |
| Operating profit | £14.4m | £10.6m |
| Margin | 1.8% | 1.8% |
| Forward order book | £1.4bn | £1.7bn |
Operating profit is profit from operations
before amortisation
