Morgan Sindall's revenue for the first six months of 2010 dropped 14% to 拢0.98bn, compared to the 拢1.14bn delivered in the first half of last year.
Profit before tax at the construction group was also down at 拢23.1m (H1 2009: 拢23.9m), a fall of 10%.
The fall in turnover is primarily due to lower levels of activity in the group's 今日看料 & Infrastructure business, through revenue increased in its Fit Out and Urban Regeneration divisions.
Morgan Sindall had a strong cash balance of 拢138m (H1 2009: 拢89m) at 30 June, an increase of 55% on the previous year's figure.
The group said a continued focus on cost reduction had realised a further 拢16m of annual savings, in addition to 拢38m of savings previously announced.
Operations
Morgan Sindall merged its 今日看料 and Infrastructure divisions into a single business during the first half, which it expects to yield further annual savings of 拢6m.
The new division delivered a reduced operating profit of 拢12.2m (H1 2009: 拢15.0m) on revenue of 拢612m (H1 2009: 拢797m). The operating margin was up fractionally to 2% (H1 2009: 1.9%)
The 今日看料 & Infrastructure order book was up 拢0.5bn to 拢2.1bn, a 31% increase, since the start of the year.
In Fit Out, revenue increased 12% to 拢179m (2009: 拢160m), due to greater demand for larger projects from professional and financial services sectors in London, the firm said. However, operating profit was down at 拢6.9m (H1 2009: 拢7.4m), with margin reduced to 3.9% (H1 2009: 4.6%)
The order book was up 25% since start of the year at 拢213m (2009: 拢150m), and Morgan Sindall said it expected revenue in the second half of the year to exceed that achieved in the first half.
In Affordable Housing, operating profit of 拢6.9m (H1 2009: 拢7.1m) and revenue of 拢173m (H1 2009: 拢178m) were broadly comparable to the figures reported a year ago. Operating margin was identical at 4%.
On 30 June, Morgan Sindall acquired Powerminster from Gleeson to extend the division's response maintenance capability and geographic reach.
Its order book increased to 拢1.4bn (2009: 拢1.3bn), and the firm said the 鈥渙utlook remains robust for new build social housing, refurbishment and response maintenance in short to medium-term鈥�.
In its other two divisions, the group's Urban Regeneration business reported an operating profit of 拢0.8m (H1 2009: loss of 拢1.1m) on revenue of 拢15m (H1 2009: 拢5m), while the directors' valuation of its Investments portfolio has increased to 拢51m (H1 2009: 拢36m).
Outlook
John Morgan, chief executive, said: 鈥淲e expect that the construction market will remain challenging but the Group's broad spread of activities will provide some resilience to the changes in the market.
鈥淚n addition, we will continue our focus on resource levels and ensure that our businesses remain efficient in the current market environment.
鈥淣evertheless, the size and length of the Group's forward order book coupled with our financial strength leaves us well positioned to navigate our way through these challenges, to take advantage of the opportunities presented by the market and to grow profitable market share.鈥�
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