Construction and Regeneration Morgan Sindall Group Plc Annual Report and Accounts 2013 User Guide
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Annual report and accounts 2013 Construction and Regeneration Morgan Sindall Group plc Annual report and accounts 2013 User guide User guide This PDF allows you to find information and navigate around this document more easily. Back to user guide Last visited page Search this PDF Print options Preceding page Next page Links in this PDF Words and numbers that are underlined are links — clicking on them will take you to further information within the document or to a web page (opens in a new window) if they are a url (e.g www.morgansindall.com). The Group aims to deliver positive and sustainable returns for its shareholders and demonstrable value for all its stakeholders through the delivery of complex construction and regeneration projects. We build and refurbish education facilities We lead the market in regenerating estates and communities We deliver efficient energy solutions in generation, transmission and distribution Strategic report Strategic Strategic report All about Morgan Sindall Group, our 02–46 strategy and how we create value 02 Group at a glance 04 Group highlights 08 Chairman’s statement 12 Markets and strategy 18 Business model 24 Chief Executive’s review 34 Finance review 36 Risk review 42 Sustainability review Governance Governance 47–76 Information about our Board of directors and corporate governance 48 Board of directors 50 Group management team 52 Corporate governance statement 58 Directors’ remuneration report 73 Directors’ report We undertake aviation 76 Directors’ responsibilities statement projects covering terminals, air traffic control centres, runways, hangars and airport infrastructure Financial statements Financial Financial statements 78 Independent auditor’s report Group consolidated financial statements 77–120 The Group’s consolidated financial statements for the year ended 31 December 2013 81 Consolidated income statement 81 Consolidated statement of comprehensive income 82 Consolidated balance sheet 83 Consolidated cash flow statement You can find further information 84 Consolidated statement of changes in equity on Morgan Sindall Group here: 85 Significant accounting policies 89 Critical accounting judgments and estimates A PDF download of our 2013 Annual report 90 Notes to the consolidated financial statements www.corporate.morgansindall.com/annual-report-2013 Company financial statements Our corporate website The Company’s financial statements for the year www.corporate.morgansindall.com ended 31 December 2013 Sustainability 110 Company balance sheet www.corporate.morgansindall.com/sustainability 111 Company combined statement of movements in reserves and shareholders’ funds 112 Significant accounting policies 114 Notes to the Company financial statements 119 Shareholder information Morgan Sindall Group plc Annual report and accounts 2013 Strategic report Group at a glance 02 Group at a glance Morgan Sindall Group is a leading UK construction and regeneration Revenue group employing circa 5,700 people. By focusing on delivery the £2,095m report Strategic Group is able to offer innovative and cost effective solutions to clients. 2012: £2,047m Construction is offered through a network of offices to deliver projects Operating profit – adjusted* of all sizes with skills that provide clients with a complete design, £33.6m 02–46 construction, refurbishment and maintenance service for their property 2012: £48.1m and infrastructure assets. Working in long-term trusted partnerships, the Group’s expertise in mixed-use and housing-led regeneration is creating large-scale economic and social renewal throughout the country. Construction Offers national design, construction and Revenue infrastructure services to private and public & Infrastructure sector clients. The division works on projects, £1,234m 2012: £1,168m and in frameworks and strategic alliances Governance of all sizes, across a broad range of markets Operating profit – adjusted* including commercial, defence, education, energy, healthcare, industrial, leisure, retail, £12.7m transport and water. 2012: £19.7m 47–76 Fit Out Specialises in fit out and refurbishment projects Revenue in the commercial, central and local government office, further education and retail banking £427m markets. Overbury operates as a national fit 2012: £437m out company through multiple procurement Operating profit – adjusted* routes and Morgan Lovell specialises in workplace consultancy and in the interior £10.9m design and build of offices. 2012: £11.3m Affordable Specialises in the design and build, refurbishment Revenue and maintenance of homes and the regeneration Housing of communities across the UK. The division £381m statements Financial operates a full mixed-tenure model creating 2012: £386m homes for rent, shared ownership and open Operating profit – adjusted* market sale. £8.6m 2012: £11.5m 77–120 Urban Works with landowners and public sector Revenue partners to unlock value from under-developed Regeneration assets to bring about sustainable regeneration £62m and urban renewal through the delivery 2012: £62m of mixed-use and residential-led projects. Operating profit – adjusted* Typically creates commercial, retail, residential, leisure and public realm facilities. £1.0m 2012: £2.7m Investments Realises the potential for under-utilised property Directors’ assets and promotes economic growth, primarily portfolio valuation through strategic partnerships with the public sector, by providing flexible structuring and £14m funding solutions and development expertise. 2012: £32m The division covers a wide range of markets Investments carrying value including asset backed, education, health care and social care, residential, student £12.8m accommodation, leisure and infrastructure. 2012: £18.2m *Before intangible amortisation and exceptional operating items. Morgan Sindall Group plc Annual report and accounts 2013 Strategic report Group at a glance 03 Strategic report Strategic 02–46 Governance 47–76 Financial statements Financial We relocate staff to new offices with minimal downtime 77–120 We help keep traffic flowing on the UK’s We complete over highways 200,000 home repairs every year We carry out 50% of We won 36 Considerate projects in live working Constructors awards We fit out office environments in 2013 environments for 18 of We complete fit outs for the top 20 UK law firms We work in the education half the FTSE 100 including We revitalise derelict market by designing, the nine largest companies dockyards into vibrant We have delivered 37% building and fitting out waterside residential of all the SKA gold and silver education facilities We help maintain and districts accreditations awarded improve the UK’s water networks We offer opportunities to circa 300 apprentices each year We partner with local authorities to deliver positive change and economic growth Morgan Sindall Group plc Annual report and accounts 2013 Strategic report Group highlights 04 Group highlights The Group has seen challenging conditions predominate across most of its markets, with competitive pressures impacting on margins and profitability. The Group’s track record and report Strategic integrated offer of design, construction, development and funding solutions has enabled it to win significant construction and regeneration projects and long-term frameworks this year. 02–46 Revenue £m Revenue increased 2% with Adjusted profit before tax* £m Adjusted profit before tax has limited recovery across the fallen 34% with competitive Group’s markets. pressure adversely impacting margins in Construction & Infrastructure and Affordable Housing. Reported profit before tax was £13.9m £2,095m 2% £31.3m 34% (2012: £34.2m). 13 2,095 13 31.3 12 2,047 12 47.1 11 2,227 11 45.3 Governance Dividend pence The dividend has been held Adjusted EPS* pence Adjusted EPS has fallen 34% despite falling profit reflecting in line with the fall in adjusted the Board’s confidence in the profit before tax. Basic EPS 47–76 Group’s outlook. was 35.4p (2012: 72.5p). 27.0p 0% 60.9p 34% 13 27.0 13 60.9 12 27.0 12 92.0 11 42.0 11 80.2 Committed order book £bn Increased order book Regeneration and The pipeline shows the supports the Board’s view development pipeline £bn Group’s share of forward of the Group’s prospects. development values and demonstrates the growing Financial statements Financial contribution of the Group’s regeneration activities. £2.4bn 8% £3.0bn 23% 13 2.4 13 3.0 12 2.2 TO READ MORE ABOUT 12 2.5 TO READ MORE ABOUT COMMITTED ORDER BOOK: REGENERATION AND DEVELOPMENT 11 2.3 SEE PAGE 26 11 2.1 PIPELINE: SEE PAGE 26 77–120 *Adjusted is defined as before intangible amortisation of £2.7m (2012: £2.9m, 2011: £3.9m), exceptional operating items of £14.7m (2012: £10.0m, 2011: £1.4m) and (in the case of earnings per share) deferred tax credit of £2.5m (2012: £1.5m, 2011: £2.8m). TO READ MORE ABOUT OUR performaNce: SEE PAGES 34 AND 35 Morgan Sindall Group plc Annual report and accounts 2013 05 PwC Embankment Place London We fitted out a complex, live, working environment with report Strategic minimal disruption to our client’s day-to- day business We set new standards in fit out 02–46 We enhanced the commercial We broke BREEAM property value, records with a delivering a new 96.31% score EPC A-rated building Governance 47–76 Financial statements Financial 77–120 We installed a tri-gen unit providing combined heating, cooling and power that utilises biofuel We worked 24 hours a We created a new day, seven days a week, dynamic workplace for 42 weeks future-fit for 15 years Morgan Sindall Group plc Annual report