* Full-year pretax profit 34.2 mln stg vs 40 mln stg last yr
* Full-year revenue falls 8 pct to 2.05 bln stg
* Order book declines 9 pct to 3.1 bln stg
* Shares fall as much as 11 pct
(Rewrites throughout; adds CEO quote, background, analyst
comment; updates share movement)
Feb 15 British construction company Morgan
Sindall Group Plc halved its final dividend and said it
expected the market to remain challenging in the short term,
sending its shares down as much as 11 percent.
The company, which gets roughly half its revenue from
government contracts, also reported a 15 percent fall in
full-year profit, hurt by government spending cuts.
With the UK on the verge of a triple-dip recession, the
government has so far shied away from increasing public
infrastructure spending outright as it tries to keep the fiscal
deficit in check.
The dividend cut was disappointing, but not a major surprise
following the management changes and the profit warning Morgan
Sindall issued in November, Panmure Gordon analyst Andy Brown
said, downgrading the stock to "sell" from "hold."
Morgan Sindall's largest shareholder John Morgan returned as
chief executive in November, after the company warned it would
miss its full-year trading forecast.
"The key here is not (a) worsening market outlook or a
weaker balance sheet but a resetting of dividend policy based on
the view that 2013 is the trough from which the company can
resume growth," Numis Securities analyst Howard Seymour wrote in
Morgan Sindall, which builds houses, refurbishes offices and
undertakes redevelopment projects, cut its final dividend to 15
pence per share from 30 pence a year earlier.
Profit before tax fell to 34.2 million pounds in the year
ended Dec. 31 from 40 million pounds in 2011.
Revenue declined 8 percent to 2.05 billion pounds for 2012.
Revenue from the company's core construction and infrastructure
unit, which designs and builds roads, rails, and utilities, also
fell about 8 percent to 1.17 billion pounds.
The company, which got 70 percent of its work in the
construction business from the public sector about four years
ago, has been reducing its exposure to the public sector as it
copes with government budget cuts.
Margins at the construction business will remain under
pressure in 2013, Chief Executive John Morgan told Reuters.
"We expect a broadly flat performance from the other
business units," the CEO added.
Morgan Sindall's order book slipped about 9 percent to 3.1
Margins at its affordable housing business, which brings in
about a fifth of the company's revenue and has been relatively
more profitable, shrunk a percentage point to 3 percent.
Shares in the company were trading down 9.2 percent at 523
pence on the London Stock Exchange at 1125 GMT, after touching a
low of 512.27 pence.
($1 = 0.6460 British pounds)
(Reporting By Abhirup Roy, Writing by Brenton Cordeiro, Editing
by Joyjeet Das)