Member Article

Morgan Sindall, Lovell and Muse all contribute to ‘expected’ half-year for Morgan Sindall Group

Construction, infrastructure and design company Morgan Sindall, which is working on a number of major construction schemes in the North West, has contributed to half year results released by its parent company Morgan Sindall Group plc, the construction and regeneration group.

Morgan Sindall Group, which operates through five divisions of construction and infrastructure, fit out, affordable housing, urban regeneration and investments, has delivered half year results in line with expectations for the six months ending 30 June 2014.

Against a continued backdrop of challenging market conditions, operating profit before amortisation and exceptional operating items was £15.2 million (2013: £16.2 million) on revenue of £998 million, a 2% decrease over the same period last year (2013: £1,019 million).

The Group reports an order book of £2.7 billion, up 14% on the previous year end (2013: £2.4 billion), supported by a £3.2 billion pipeline of regeneration schemes, up 5% from £3.0 billion last year end. Adjusted earnings per share for the period are 28.6p (2013: 31.5p). The interim dividend has been maintained at 12.0p per share (2013: 12.0p).

Key projects which the company is delivering in the North West include:

Liverpool:

The new £15 million St Hilda’s School close to Sefton Park in Liverpool. The client is Liverpool City Council but the project is being delivered under the North West Construction Hub framework. Once complete in February 2016, the school will accommodate around 1,000 pupils aged 11 to 18.

In addition, Morgan Sindall is currently on site at two primary schools in Liverpool: Northway Primary in Wavertree and New Park Primary in Kensington which are also both being delivered under the North West Construction Hub.

Also this year, Morgan Sindall has completed the construction of an £8 million office and laboratory development at Liverpool Science Park (LSP) which sits at the heart of Liverpool’s Knowledge Quarter.

The new four-storey office block, the third building of a wider development, extends Innovation Centre 1 (ic1) by 3,750 sq m and delivers flexible, fully serviced office and laboratory facilities across all four floors.

Chester:

Morgan Sindall is also on site at Greyhound Retail Park in Chester which is being transformed with the addition of 48,000 sq ft of retail and leisure space. The £3.5 million extension for Land Securities includes an anchor ASDA store.

Manchester:

Morgan Sindall has completed and handed over a £19.7 million Rail Operating Centre in Manchester for Network Rail. Situated in the Ashburys area of east Manchester, the Rail Operating Centre provides a base from which all of Network Rail’s operations in the region will be run as well as accommodating personnel and control equipment.

The three-storey, steel-framed building has achieved a BREEAM ‘Very Good’ rating and boasts an attractive and sustainable ‘green roof’, which has been planted with sedum vegetation to absorb rainwater and provide insulation.

Among other key North West projects is the refurbishment of Oldham Old Town Hall for Oldham Council. Morgan Sindall recently began preparatory work for the transformation of the historic building into a family entertainment centre including a cinema and restaurants.

In June, Morgan Sindall, in joint venture and as part of a collaborative agreement with three other framework delivery partners, was awarded a £184 million deal as part of the Highways Agency National Major Projects Framework. The work will involve upgrading a 17-mile stretch of the network between junction 8 of the M60 near Sale and junction 20 of the M62 near Rochdale to smart motorway status in order to ease congestion and improve journey times.

Morgan Sindall is also currently on site at the Grade II-listed Manchester Victoria railway station, undertaking a major refurbishment and renewal project for Network Rail. Other projects for Network Rail include the construction of two Rail Operating Centres in Manchester and Rugby - the £19.7 million Manchester Rail Operating Centre was successfully completed and handed over in July.

Lancashire:

Morgan Sindall’s Utility Services business continues to deliver projects, as part of a ten-year agreement which runs until March 2017, on National Grid’s Electricity Alliance Central (EAC) framework which provides major enhancements to the UK’s electrical transmission infrastructure.

Most recently, the EAC has been awarded a £10 million scheme at Middleton Substation, near Heysham, Lancashire. This new 400kV substation involves the installation of a compact five-bay Gas Insulated Switchgear (GIS) hall and work started on site in March this year.

Cumbria:

The company is close to finishing work on a new £18 million office development for the Nuclear Decommissioning Authority at Albion Square in Whitehaven, Cumbria. Completion is due during the summer of 2014 on the two four-storey office buildings which provide 100,000 sq ft of space.

The buildings will house approximately 1,000 Sellafield Ltd office workers, who will move into the building from the Sellafield site.

Graham Shennan, managing director of Morgan Sindall comments: “Despite the challenging market conditions persisting into 2014, Morgan Sindall has maintained its ability to secure important contracts and framework wins across the broad range of sectors in which we operate.

“Our commitment to operating safely and sustainably continues to drive our business forward, as does our desire to constantly deliver exceptional service to our customers, and we do this through our talented employees working seamlessly with our supply chain and joint venture partners to provide a fully integrated service on our projects.

“We remain well positioned to capitalise on further opportunities throughout the remainder of the year.”

Another division of the Group, Lovell, which has regional offices in Altrincham, has made its own contribution to the half year results.

During the first six months of this year Lovell has been working with housing associations and local authorities on new affordable housing developments and major housing refurbishment schemes, regeneration programmes and repairs and maintenance services across the UK.

The company’s order book now stands at £735 million (up 27 per cent on the 2013 year-end figure) with its regeneration and development pipeline at £765 million (up seven per cent on the 2013 year-end figure).

Key housing projects for Lovell in Manchester and the North West include:

• A £20 million development of 125 homes for sale which is part of the company’s ongoing development, Axis at The Way, in Beswick, east Manchester.

• Faraday Green, a £12.5 million development of 85 homes for open market sale as part of the company’s ongoing development at Platting Village, east Manchester.

• A £22 million programme for Blackpool Council to redevelop the town’s Queens Park estate with 198 contemporary apartments and houses.

• A five-year, £4 million kitchen modernisation programme for West Lancashire Borough Council.

• A £1.4 million design and build project at Albion Mill, Bolton, for HB Villages. The first phase will create 16 extra-care apartments.

Lovell managing director Stewart Davenport says: “The first half of 2014 has seen the confidence in the housing market continue. First-time buyers returned in greater numbers to the market supported by the Government’s Help to Buy initiative which has resulted in increased sales activity in all our regions.

This has enabled us to invest in new opportunities focused on mixed tenure projects developed in partnership with housing associations and local authorities.

“We are well placed to capitalise on public sector land opportunities procured by the Greater London Authority and Homes and Communities Agency as we are on all their partner panels.

“Contracting, in particular new build, remains competitive and we continue to maintain a healthy and well balanced forward order book through selective pursuit of opportunities. We are very pleased to have secured five contracts in Scotland worth over £59 million this year, together with numerous refurbishment contracts across the business.

“We remain committed to delivering the complete range of housing solutions for our partners and customers as well as offering a complete maintenance service nationally. We continue to build a solid and balanced platform for growth in 2015 and onwards.”

Meanwhile, another division of the Group, Muse Developments, has also contributed to the positive results.

During the first six months of this year, the national developer and regeneration specialist - which has offices in London, Manchester, Glasgow and Leeds – moved forward on a number of significant urban regeneration schemes across the UK. The company also maintained a healthy order book and development pipeline, which now stands at £2.3 billion.

Key activity for Muse in the North West this year includes:

North West

• Salford Central (Chapel Street and New Bailey): Progress continues at Salford Central, a 44-acre regeneration of Salford’s civic and historic quarter with a 143-bed Premier Inn and municipal car park due for completion later this year.

The scheme is being delivered by English Cities Fund (ECf) - a joint venture between Muse Developments, Legal & General Property and the Homes and Communities Agency. Key elements include a new gateway to the city centre - linking the university to Manchester’s Spinningfields district through a revitalised Chapel Street - and New Bailey which has been masterplanned to provide over 2 million sq ft of high-quality office space along with supporting retail, leisure and residential uses.

At Chapel Street, construction of the Vimto Gardens residential development is expected to complete in early 2015. The six-storey luxury residential building will deliver 83 apartments and 14 town houses, an internal private courtyard, and retail and commercial units on the ground floor.

Planning permission has also been secured for One New Bailey, a 125,000 sq ft office building in the New Bailey area of the development where construction will start in the autumn.

• Blackpool: The first phase of the Talbot Gateway regeneration scheme, which Muse Developments is delivering in partnership with Blackpool Council, is now complete.

Phase one includes the creation of 126,000 sq ft council office development, a 120,000 sq ft Sainsbury’s store, a new public square, a remodelled 650-space multi-storey car park and a range of highway improvements. The Sainsbury’s store is now open and plans for a 130-bed hotel, as part of phase two, are progressing.

• Chester: Construction is underway at City Place, Chester, a 7.5 acre commercial development which will play an important part in the city’s very first ‘Central Business Quarter’ situated on City Road close to Chester Railway Station. The first phase of the scheme includes a six-storey 70,000 sq ft BREEAM ‘Excellent’ office building (One City Place) which is due for completion by November 2015. It marks the first building in Chester’s new Central Business Quarter which by 2028 will offer a total of 440,000 sq ft of state-of-the art office space in seven new buildings, creating around 3,500 jobs.

In the next couple of months work will start on remodelling part of the Grade II-listed station building and former rail car park to create a new landscaped attractive public realm area and gateway from the station into the scheme. Plans for the whole scheme include 200 homes, restaurants and leisure facilities and car parking for the station in addition to the new, offices.

• Stockport Exchange: Located in the heart of Stockport immediately adjacent to the mainline train station, Stockport Exchange is a new mixed-use destination combining high quality office space with excellent retail and leisure facilities.

Muse is delivering the scheme in partnership with Stockport Council. It will create a thriving commercial business district around a new public space with amenities including a hotel, cafes, restaurants and leisure centre.

Phase One, a 1,000 space multi storey car park, was completed and opened for trading earlier this year. Phase Two, a 115 bedroom hotel and 50,000 sq ft office with active ground floor space, will commence in late 2014 with both buildings and the new public realm completing in 2016.

Mike Horner, Muse Developments regional director for the North West, says: “We are starting to see a real growth in confidence, particularly in the investment sector, and our hard work over recent years has made sure we’re in an excellent position to take advantage of the upturn.

“It’s been a busy year for us so far, with major schemes in Salford and Chester getting underway and the first phases of our schemes in Stockport and Blackpool completing. We’re looking forward to continuing this success with our partners whilst also pursuing new opportunities across the region.”

This was posted in Bdaily's Members' News section by Simon Malia .