Acquisition of contracts from Connaught


 

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RNS Number : 4635S 
Morgan Sindall Group PLC 
10 September 2010 
 

 
10 September 2010 
 
             Acquisition of social housing contracts from Connaught 
 
Morgan Sindall Group plc ("The Company" or "Morgan Sindall"), the construction 
and regeneration group, today announces that its Affordable Housing division, 
Lovell Partnerships ("Lovell"), has reached agreement to acquire the majority of 
the ongoing contracts and their related assets of the social housing division of 
Connaught plc, allowing essential maintenance services to continue without 
interruption. Around 2,500 employees connected with the ongoing contracts will 
transfer to Lovell as part of the agreement. 
 
A total cash consideration of GBP28m has been paid for the assets, which 
represents a discount to their net book value. The payment has been made from 
the Company's existing cash resources.  At 30 June 2010, Morgan Sindall had net 
cash of GBP138m and the Group will continue to have a strong financial position 
following the acquisition. 
 
The acquisition is consistent with Morgan Sindall's long-term strategy to 
achieve leading positions in its chosen markets. The acquisition will 
significantly enhance Lovell's market leading position in the affordable housing 
sector and creates a national, full-service business delivering planned and 
reactive maintenance as well as new-build social and open market affordable 
housing.  The new contracts are expected to generate approximately GBP200m of 
additional annual revenue, split broadly between response maintenance contracts 
and Decent Homes, planned maintenance contracts. 
 
In the year to 31 December 2009, Lovell reported an operating profit of GBP14.9m 
on revenue of GBP374m. On 30 June 2010, the Group announced the strategic 
acquisition of Powerminster Gleeson Services to extend the division's response 
maintenance capability and geographic reach. 
 
Commenting on the acquisition, John Morgan, Executive Chairman, Morgan Sindall 
Group plc, said: 
 
"This is a step change for Lovell. The acquisition significantly increases the 
scope and scale of our planned and reactive maintenance activities and further 
develops our market leading position. 
 
"Our focus now will be to ensure a smooth handover of the contracts and to 
minimise disruption to essential maintenance services.  We look forward to 
working with our new and existing clients and to provide them with a high level 
of service, as well as protecting jobs on the contracts we are acquiring. 
 
"Through the experience built up at Lovell over many years, we are happy with 
the terms on which we are acquiring these contracts. The Board believes that 
this acquisition represents excellent value for our shareholders." 
 
There will be a conference call for analysts and investors only at 10am today. 
For details of the call, please contact Blythe Weigh Communications on 020 7138 
3204. 
 
                                      Ends 
 
Media/Analyst Enquiries: 
 
Morgan Sindall Group plc                                       Tel: 020 7307 
9200 
Paul Smith, Chief Executive 
David Mulligan, Finance Director 
 
Blythe Weigh Communications                               Tel: 020 7138 3204 
Tim Blythe 
Mobile: 07816 924626 
Paul Weigh 
Mobile: 07989 129658 
 
 
Lovell Client Enquiries: 
 
Lovell Partnerships 
Kevin Willetts, Director of Business Development    Mobile: 07890 630458 
 
Notes to Editors: 
Morgan Sindall Group plc is a leading UK construction and regeneration group 
operating through four divisions of fit out, construction and infrastructure, 
affordable housing and urban regeneration, and an investment unit. 
 
Lovell 
Lovell is a leading UK provider of affordable housing. The company has expertise 
in new-build, regeneration and refurbishment while its responsive and planned 
maintenance business Lovell Respond provides comprehensive maintenance and 
estates management services. With offices in England, Scotland and Wales, Lovell 
offers a unique one-stop shop of services with the ability to build homes, offer 
a full menu of tenure options and maintenance for life. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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