CONSTRUCTION heavyweight Morgan Sindall came under pressure yesterday after it warned sluggish housing and property markets would hit the group in 2009.
Its shares tumbled nearly 22 per cent after it said the "increasingly challenging" conditions in the past three months would impact on the coming year's figures.
While social housing work remains healthy, home sales on the open market are being h
it by the scarcity of mortgage deals following the credit crunch. These sales accounted for 6 per cent of group revenues in 2007, but volumes will fall to half that level this year, Morgan warned.
It added: "The division will continue to be impacted in 2009 by the deteriorating condition of the housing market currently being experienced."
Numis Securities analyst Howard Seymour said: "It is the group's housing operations which are seeing the biggest hit at present and this is likely to cause some concern."
Sindall's construction division reported mixed trading, with weaker demand from commercial property clients offset by strong public-sector spending, particularly in education projects.
But increased spending on transport and utilities helped the group's infrastructure arm land new deals in a buoyant market.
Major contracts won by the firm include a £12 million deal from airports operator BAA to resurface the main runway at Edinburgh airport.
• Struggling housebuilder Barratt Developments is said to be close to agreeing a deal with its lenders to strengthen finances hit by the housing market downturn.
The company's bankers – led by HSBC, Royal Bank of Scotland, Barclays and Lloyds TSB – have given initial approval for a refinancing deal, according to reports.
The full article contains 270 words and appears in The Scotsman newspaper.
