Morgan Sindall Investments Helps Group's Results
Project development and funding solutions specialist Morgan Sindall Investments Limited (MSIL) has contributed to preliminary results for the year ended 31 December 2017 released today by Morgan Sindall Group plc, the construction and regeneration group.
The Group delivered a strong performance for the year with adjusted operating profit up 41 per cent to £68.6 million (FY 2016: £48.8 million) on revenues of £2,793 million, a 9 per cent rise on the previous year (FY 2016: £2,562 million). The reported operating profit was up 42 per cent for the year at £67.4 million (FY 2016: £47.4 million) with the Group ending 2017 with a net cash position of £193 million (FY 2016: £209 million). Adjusted earnings per share rose 43 per cent on last year at £121.1p (FY 2016: 84.7p). The dividend for the year is 45.0p, a 29 per cent increase from 2016’s 35.0p per share. The Group’s order book was also up 6 per cent to £3.8 billion.
Key large-scale investment projects for MSIL during 2017 include:
• Morgan Ashley: MSIL formed a new joint venture with health and community care developer Ashley House plc to develop extra care and supported housing called Morgan Ashley Care Developments LLP (MACD). MSIL acquired a 50 per cent stake in the joint venture (JV) for cash, with Ashley House transferring its pipeline of extra care, care and supported living schemes which have a developed value of £200 million. The support and broad capabilities of the wider Morgan Sindall Group will enhance the JV’s capability to deliver this pipeline at an increased pace and scale.
• SHIP: Universities Superannuation Scheme Ltd (USS) and MSIL have formed a strategic joint venture, the Supported Housing Investment Limited Partnership (SHIP). It brings together USS, one of the largest pension schemes and real estate investors in the UK, with MSIL’s market-leading expertise in social infrastructure development and investment. The partners have committed £100 million to SHIP, with USS providing 95 per cent of the capital and MSIL retaining a five per cent stake and acting as asset, property and portfolio manager. As the asset class matures, and provided that the market continues to offer suitable opportunities, the JV partners intend to increase the SHIP portfolio value to £200 million. SHIP will initially deliver over 500 new supported independent living apartments across the UK enabling vulnerable people with physical and learning disabilities to live as independently as possible.
• HB Villages: In a joint venture with bespoke supported living developer HB Villages, MSIL continued to deliver new supported living apartments across the country. The company currently has 11 new schemes under construction and a further eight in the pipeline with many being sold to the Supported Housing Investment Limited Partnership (SHIP) joint venture with pension scheme and real estate investors Universities Superannuation Scheme (USS). The company’s first elderly care scheme, a £16 million development of 80 apartments, is under construction in Northampton.
• hub West Scotland: As the main private sector shareholder of the public private joint venture organisation hub West Scotland, MSIL is delivering over £387 million of infrastructure projects for 15 public sector partners across the Greater Glasgow and Clyde region. MSIL’s sister company Morgan Sindall Construction & Infrastructure is currently on site with the Gorbals and Woodside Design Build Finance and Maintain projects and a Design Build Development Agreement contract for St Andrew’s Primary School.
• STRIDE Burton: The joint venture between MSIL’s health brand Community Solutions and design and consultancy firm Arcadis, was appointed by Burton Hospitals NHS Foundation Trust as its Strategic Infrastructure and Efficiency Partner (SIEP) to deliver significant efficiency savings, infrastructure projects and refurbishment works, ranging from £50,000 to £50 million over a 10-year partnering agreement. In August 2017, the trust granted STRIDE a five-year option to develop a £55 million Health Care Village on the surplus land adjacent to its Queen’s Hospital site in Burton (Outwoods site). STRIDE has submitted an outline planning application for the proposed village with a planning decision expected in April this year. The development, which is scheduled to provide GP and community services for about 30,000 patients, currently includes extra care residences, a step-down facility to mitigate delayed discharges, as well as accommodation for vulnerable adults and a 100+ place nursery. The health village will also benefit from the inclusion of a community hub that will support greater integration between the different users and the local community.
STRIDE is also reviewing a £4 million multi-storey car park for the trust on its Queen’s site. Community Solutions will continue to develop these proposals to their completion once all necessary approvals are received.
London and South
• The Oxleas Property Partnership (TOPP): a joint venture between MSIL’s health sector brand, Community Solutions and design and consultancy firm Arcadis, was appointed by Oxleas NHS Foundation Trust in July 2017, as its Strategic Infrastructure and Efficiency Partner (SIEP) to deliver significant efficiency savings, infrastructure projects and refurbishment works, ranging from £50,000 to £50 million over a 10-year partnering agreement. Oxleas NHS Foundation Trust, a mental health and community health services provider based in south-east London, operates from over 60 sites. The partnership will help to optimise the estate, and develop surplus assets to help reduce costs and maximise revenue for the trust over the next 10 years. TOPP is currently undertaking a strategic estates review which will help determine the future efficiencies for the trust and new development opportunities for the partnership.
• Slough Urban Renewal (SUR): this 50/50 joint venture Public Private Partnership between Slough Borough Council and MSIL is currently on site at its second residential development, Wexham Green, where 104 affordable two-, three- and four-bedroom homes will be built by Morgan Sindall’s housebuilding business Lovell. SUR’s first residential scheme, Milestone, a new development of 73 Lovell-built homes, has also been successful with all homes now sold.
SUR’s second phase of Arbour Park Community Sports Facility was completed in May 2017 increasing the stadium’s capacity to 1,950-spectators. Work also progressed on a number of education projects including the completion of three primary school extensions at St Mary’s Primary School, Claycots Primary and James Elliman Academy. The Group’s subsidiary Morgan Sindall Construction & Infrastructure has started construction on two multi-million-pound schemes to build Special Education Needs units at Priory Primary School and an extension to Wexham School Sports College. Construction also continued on four new leisure projects: including a refurbishment of Slough’s ice arena, a new wet and dry leisure facility known as The Centre, extension of Langley Leisure Centre, one of the town’s prime leisure sites, and the creation of the Salt Hill Activity Centre, a new family leisure facility. SUR continued to progress with a portfolio of small housing sites that will provide over 120 much-needed new council homes across 24 infill sites.
The council has also appointed SUR to deliver a major mixed-use development on the former Thames Valley University site. The indicative plans include the provision of 1,400 homes, 270,000 sq ft of Grade A office space, 50,000 sq ft of leisure and retail facilities, and high quality public realm. SUR has submitted planning proposals for a mixed-use development on the former old central library site in Slough town centre. The development includes two Marriott International hotels (244 rooms) and 62 residential apartments. At Stoke Wharf, a major redevelopment of Slough Basin, the land assembly has been completed enabling the joint project team with urban waterfronts developer Waterside Places, to proceed with securing planning consent for residential development of around 240 new homes, adjacent to the Grand Union Canal.
• Bournemouth Development Company is a 50/50 joint venture regeneration public private partnership between Bournemouth Borough Council and MSIL which is delivering the council’s Town Centre Vision. The JV is currently on site at Berry Court, a 113-home private rented sector scheme - a redevelopment of a council-owned car park - being delivered in partnership with Radian. Planning has also been granted for the St Stephen’s site, a council-owned car park set to be redeveloped through a £12.5 million scheme providing 46 apartments for private rent and also approved to be retained by the council as an investment.
Lisa Scenna, managing director of Morgan Sindall Investments Limited, comments: “We continue to work closely with our partners to achieve their regeneration aspirations and demonstrate our ability to extend the pipeline of opportunities within our strategic partnerships”