Morgan Sindall Group Lifts 2025 Forecasts on Fit Out Division Strength

Morgan Sindall upgrades 2025 outlook as Fit Out powers ahead

Morgan Sindall has lifted its expectations for the 2025 financial year, saying performance will be significantly ahead of previous guidance. The catalyst is continued strength in its Fit Out division, while the rest of the portfolio largely tracks prior guidance.

The company has not disclosed the new profit figure or the scale of the upgrade, but the tone is clear: momentum has improved meaningfully since the July half-year update.

Division-by-division: where the upgrades and risks sit

Fit Out division drives the profit beat

Fit Out continues to fire on all cylinders, combining strong trading with solid delivery. Profits from this division are now expected to significantly exceed the Group’s previous expectations.

The secured order book at 31 August 2025 was £1.6bn, up 8% on both the half-year and year-end 2024. Importantly, £900m of that sits in 2026 and beyond, which gives good visibility into next year. The Group’s medium-term target for Fit Out remains unchanged, which suggests management sees this outperformance as sustainable within its existing framework rather than a reason to reset long-term ambitions just yet.

Partnership Housing: steady profits, bigger balance sheet commitment

Profits are in line with previous guidance. Strategically, the division has tightened its public sector partnerships, being appointed preferred developer for Birmingham’s Druids Heath regeneration to build around 3,500 new homes over the next two decades, and signing a development agreement with Cardiff Council and Vale of Glamorgan Council to deliver 2,500 new homes over the next ten years.

The average capital employed for the full year is now estimated at £420m to £430m. Capital employed is the money tied up in a business to support operations and growth, so this signals continued investment to feed the pipeline and future returns.

Mixed Use Partnerships: near-term losses to fund future opportunities

Trading reflects higher investment costs on schemes yet to start on site and on future opportunities. Operating losses in the second half are expected to be almost double the £1.5m loss in the first half. That implies a larger H2 drag as the division builds for future value.

Full-year average capital employed is now guided to £115m to £125m. Investors should expect nearer-term losses here with the payback coming as schemes progress.

Construction and Infrastructure: on track with growing order books

Both Construction and Infrastructure remain on track to deliver profits in line with previous guidance. Management highlights high quality, growing order books, which supports revenue visibility into 2026.

Property Services: modest profit as guided

No change here. Property Services remains on track for a modest full-year profit, consistent with earlier guidance.

Order book strength: £12.2bn secured workload

The Group’s secured order book stood at £12.2bn at 31 August 2025. That is 2% ahead of the half-year and 7% up on the 2024 year end position.

Secured order book means contracted work yet to be delivered. In short, it is forward revenue visibility. Growth here, alongside Fit Out’s £1.6bn book, underpins the statement of confidence for 2025 and beyond.

Balance sheet and cash: net cash guidance raised

From 1 January to 30 September, daily average net cash was £361m, compared to £372m over the same period last year. Of this, £45m relates to amounts held in jointly controlled operations or set aside for designated suppliers.

For the full year, average daily net cash is expected to be in excess of £350m, which is ahead of the previous guidance of £330m. Daily average net cash measures the average cash position across the period and tends to be a better indicator for working capital-intensive contractors than a single point-in-time figure. The takeaway is simple: the balance sheet remains a source of strength and flexibility.

Why this update matters for investors

Positives

• Upgraded 2025 outlook, driven by operational strength rather than one-offs.
• Fit Out’s order book growth and profitability provide near-term earnings momentum and improved visibility into 2026.
• Group secured order book up to £12.2bn, supporting revenue security.
• Stronger cash guidance (>£350m average daily net cash) highlights disciplined working capital management.
• Partnership Housing wins add long-duration, high-quality public sector work.

Watch-fors

• Mixed Use Partnerships will post a larger H2 operating loss as investment is stepped up.
• Higher capital employed in housing and mixed use ties up more cash in the near term, even if it supports longer-term returns.
• The company has not disclosed the scale of the profit upgrade, so the market will still be second-guessing the magnitude until full-year results.

Key numbers at a glance

Group secured order book (31 Aug 2025)	£12.2bn
Order book growth vs HY 2025 / YE 2024	+2% / +7%
Fit Out secured order book	£1.6bn (8% higher vs HY 2025 and YE 2024)
Fit Out work scheduled for 2026 and beyond	£900m
Partnership Housing – average capital employed (FY)	£420m to £430m
Mixed Use Partnerships – H1 operating loss	£1.5m
Mixed Use Partnerships – H2 operating loss	Expected to be almost double H1
Mixed Use Partnerships – average capital employed (FY)	£115m to £125m
Daily average net cash (1 Jan to 30 Sep)	£361m (includes £45m held in JVs/designated suppliers)
Average daily net cash guidance (FY)	In excess of £350m (previous guidance £330m)
Full-year results date	25 February 2026

My take

This is a clean, operationally led upgrade. Fit Out’s performance is doing the heavy lifting, and the order book across the Group is moving in the right direction. Cash guidance has been raised and remains robust by sector standards.

The trade-off is visible: more capital committed to Partnership Housing and Mixed Use Partnerships, with the latter posting higher near-term losses. If execution holds, that investment should translate into medium-term earnings. For now, the headline is simple: 2025 is shaping up better than expected, and the pipeline says there is more to come.

What to watch next

• Any quantification of the upgraded profit outlook prior to year-end. Currently not disclosed.
• Conversion of the £12.2bn order book into margins, especially in Construction and Infrastructure.
• Progress on the Druids Heath, Cardiff and Vale partnerships as schemes move toward site starts.
• Cash discipline as capital employed rises in housing and mixed use.

The full-year results are due on 25 February 2026. Until then, the message is clear: operational momentum, a growing order book, and a stronger cash outlook have set Morgan Sindall up for a better-than-expected 2025.