Morgan Sindall Posts Record FY 2025 Results with 35% Profit Jump and 20% Dividend Hike

Morgan Sindall FY 2025: record profits, fatter dividend, and a bulging pipeline

Morgan Sindall has delivered another record year. Adjusted profit before tax jumped 35% to £232.6 million on revenue up 10% to £5,019 million. The final dividend is up 20% to 158.0p per share for the year, backed by a rock-solid balance sheet with £531 million of year-end net cash and a strong secured order book.

The Group’s “adjusted” numbers strip out £0.4 million of intangible amortisation and a small £0.4 million exceptional building safety charge. Importantly, the order book plus preferred bidder work – bids where Morgan Sindall is first in line but not yet contracted – sits at a record £19.1 billion.

Key FY 2025 numbers investors should know

Metric	FY 2025	FY 2024	Change
Revenue	£5,019m	£4,546m	+10%
Adjusted operating profit	£225.7m	£162.6m	+39%
Adjusted PBT	£232.6m	£172.5m	+35%
Adjusted EPS	370.0p	278.8p	+33%
Net cash (year end)	£531m	£492m	+£39m
Average daily net cash	£368m	£374m	£6m lower
Secured order book	£12.0bn	£11.4bn	+5%
Preferred bidder work	£7.1bn	£6.1bn	+17%
Total dividend	158.0p	131.5p	+20%

Adjusted PBT margin improved to 4.6% (PBT before amortisation and exceptionals). Adjusted operating margin rose to 4.5%.

Why this performance matters for shareholders

This is quality growth. Profits rose much faster than revenue, showing operating discipline and better mix. Cash generation was strong – operating cash inflow of £195.9 million – even after a hefty £124.6 million net investment into Partnership Housing to seed future growth. Dividend cover is 2.4x, right in the Board’s 2.0x-2.5x policy range.

The order book is not just big, it is high quality, reflecting negotiated and framework work across regulated and public markets. That tends to be lower risk and longer duration. The Group also expects average daily net cash in 2026 to be in excess of £400 million, which is a powerful competitive edge when bidding and a cushion if markets wobble.

Division-by-division: who did the heavy lifting?

Fit Out: standout again, margins holding high

• Revenue up 37% to £1,784m; operating profit up 41% to £139.9m.
• Operating margin nudged up to 7.8%.
• Order book £1,312m, down 9% after a strong year, with 93% slated for 2026 – a very visible pipeline.

My take: another superb year built on delivery and discipline. Management sensibly guide that 2026 profits will be lower than 2025 but still “significantly above” the £80m-£100m medium-term target. That is still excellent.

Construction: improving quality of earnings

• Revenue up 11% to £1,159m; operating profit up 20% to £37.0m.
• Operating margin 3.2% – bang in the 3.0%-3.5% target range.
• Order book £1,112m, up 17%, with 80% by value secured for 2026.

My take: steady, well-managed progress with sensible risk selection. 2026 is expected to land mid-range on margin with revenues moving towards £1.5bn.

Partnership Housing: resilient in a tough private market

• Revenue up 5% to £903m; operating profit up 16% to £42.0m; margin 4.7%.
• Order book up 7% to £2,330m, with 60% for 2027 and beyond.
• Capital employed rose to support long-term public partnerships, nudging ROCE to 10%.

My take: the pivot to public-sector contracting is doing its job while private open-market sales remain subdued. Management still aim for 8% operating margin and ROCE up towards 25% medium term. Expect a gradual demand recovery in 2026 and ongoing investment.

Mixed Use Partnerships: investing ahead of growth

• Revenue £52m; expected operating loss of £5.3m as planned investment was expensed.
• Order book jumped 13% to £4,615m after converting eight preferred-bidder schemes.
• Average capital employed £125.1m; ROCE -4% as a result of the planned investment phase.

My take: this is the long game. The Board has upped the medium-term ROCE target to “up towards 30%”, which tells you confidence is high. 2026 profits are flagged to be modest as more schemes start on site – value creation should follow as these build out.

Infrastructure: margins firm, revenue timing effects

• Revenue down 11% to £935m as several big frameworks are in early design phases.
• Operating profit £37.2m, just 3% lower, and margin improved to 4.0%.
• Order book £1,890m, broadly flat; around 98% secured via frameworks.

My take: the right work with the right clients in nuclear, energy, rail, water and highways. Medium-term revenue target has been raised to “towards £1.5bn” with margin guidance unchanged at 3.75%-4.25%. For 2026, revenue is expected to be closer to £1bn with margin mid-range – sensible and cash-generative.

Property Services: back to profit and now integrated

• Revenue £212m; operating profit £2.0m after 2024 remediation.
• Order book £714m, down 20% as focus shifted to delivery and rebalancing towards planned works.

This operation has been folded into Construction from 1 January 2026, which should simplify reporting and unlock synergies.

Order book and pipeline: record visibility

The secured order book rose to £12.0bn (+5%). Add £7.1bn at preferred-bidder stage and you get £19.1bn of work in the bag or near enough. Notable divisional positions: Partnership Housing £2,330m (+7%); Mixed Use Partnerships £4,615m (+13%); Fit Out £1,312m (-9% following heavy delivery); Construction £1,112m (+17%); Property Services £714m (-20%); Infrastructure £1,890m (broadly flat). That mix gives Morgan Sindall both longevity and balance across cycles.

Cash, dividends and capital allocation

• Year-end net cash £531m; lowest day net cash in 2025 was £270m.
• Operating cash flow £195.9m; free cash flow £161.5m after investment.
• Total dividend 158.0p, up 20%, covered 2.4x.

The capital allocation framework prioritises a strong balance sheet, investment in Partnerships, ordinary dividends and – if surplus remains – potential specials or buybacks. With average daily net cash in 2026 expected to be in excess of £400m, optionality is high, though management will keep plenty of headroom to stay competitive on frameworks and protect against downturns.

Outlook for 2026 and medium-term targets

Management say they are on track to deliver an outcome for 2026 in line with the revised expectations set out on 12 February 2026. Divisional signposts:

• Fit Out – another strong year, profits below 2025 but well above the £80m-£100m target range.
• Construction – margin mid-range of 3.0%-3.5%; revenue progressing towards £1.5bn.
• Infrastructure – margin mid-range; revenue nearer £1bn given project timing.
• Partnership Housing – solid profit growth; ROCE similar to 2025 as investment continues.
• Mixed Use Partnerships – modest profit as starts accelerate; average capital employed c£125m-£140m.

Targets have been lifted where it counts: Infrastructure now eyes revenue towards £1.5bn, and Mixed Use Partnerships’ ROCE target has been raised to up towards 30%.

ESG and governance quick take

MSCI ‘AAA’ and CDP ‘A-’ ratings were retained, and the Group reports a 55% reduction in Scope 1 and 2 emissions since 2019. Governance-wise, the Responsible Business Committee has been dissolved with oversight streamlined between the Board and Audit Committee, and from 1 April 2026 the CFO becomes Chief Financial and Commercial Officer.

Risks to watch and what could move the shares

• Positives: continued office fit-out demand, conversion of large regeneration schemes, infrastructure frameworks moving from design to delivery, and cash-backed optionality on capital returns.
• Negatives: slow recovery in private housing, longer preconstruction periods, project delivery risks, and cyber-security threats. Building safety remains a managed issue – the exceptional charge was only £0.4m this year.

Josh’s bottom line

This is a high-quality print from a well-run, cash-rich contractor. Fit Out was exceptional, Construction and Infrastructure are on strategy, and Partnerships are investing for the next leg. With a record pipeline, upgraded divisional targets and a 20% dividend lift, the set-up for 2026 looks sound – even if Fit Out normalises a touch. For long-term holders, this remains a disciplined compounder anchored by cash, culture and frameworks.