Morgan Sindall to beat profit targets again as construction surges

Morgan Sindall expects to beat its profit targets for 2026, with the contractor's construction arm alone on course for double-digit profit growth on last year's £40m result.

In a trading update issued today, the firm said: "Strong trading momentum has continued and, together with strong visibility of secured orders through to the end of the year, the Group now anticipates that its full year results for 2026 will be slightly ahead of its previous expectations."

The news matters because it lands against a soft backdrop. The company itself acknowledges "prevailing market conditions" — yet both construction and fit-out are out-performing the wider sector, according to the update.

What's driving the numbers?

The construction division is the standout. Morgan Sindall said it "has continued to perform strongly and is on track to deliver materially higher, double-digit profit growth, significantly ahead of expectations."

To put that in context: the division turned a £40m profit last year on revenues of just under £4bn. That's a margin of roughly 1%. The update now says operating margins are approaching 4% — a near fourfold improvement in profitability per pound of revenue if it lands there.

Fit-out is pulling in the other direction on scale. The division made £140m in profit last year — more than three times construction's result — and it's also on track to beat that figure this year.

Infrastructure rounds out the picture. It's expected to deliver more than £37m in profit, with margins topping 4% — already at the level construction is still climbing toward.

Why can the firm be confident about 2027?

Morgan Sindall didn't stop at this year. Looking further out, it said: "Despite the prevailing market conditions, the strength and breadth of the Group's diverse operations, the visibility provided by its high-quality order book for the forthcoming year, and alongside the self-help measures already taken accompanied with the capital allocation discipline in place, the Group remains confident that the outlook for 2027 will be in line with current expectations."

That statement unpacks into three working parts:

• Diversification — construction, fit-out and infrastructure are all performing, so no single division carries the forecast.
• Order book visibility — the group says it has secured orders giving it high-quality visibility into next year.
• Internal discipline — management points to self-help measures already taken plus strict capital allocation.

The mechanism here is straightforward. A secured order book converts uncertain market demand into contracted revenue, which is why the firm can guide confidently while the general construction market stays sluggish. Margin gains in construction — from about 1% toward 4% — show the other lever: it's not just selling more work, it's earning more on each job.

If the divisions hit these marks, 2026 would mark another year of the contractor beating its own targets. The next test is whether construction's margin expansion holds as it approaches the 4% level its infrastructure arm already clears.