Interim Results

Morgan Sindall PLC
11 August 2003



                               MORGAN SINDALL PLC
                       ('Morgan Sindall' or 'the Group')

              Interim Results for the six months ended 30 June 2003


Morgan Sindall plc, the construction brands group, today announces interim
results for the six months ended 30 June 2003


•       The Group has benefited from its exposure to public sector work which
        has outweighed the slow down in certain private sectors.

•       The Construction division has returned to profit.

•       Investment in both Infrastructure Services and Affordable Housing has
        produced good performance with both divisions expected to have a yet 
        stronger second half.

•       Fit Out has produced a highly satisfactory result in difficult market
        conditions.

•       Current trading robust with strong order book of £1.4bn.


Financial

•       Profit before tax and amortisation £10.4 million (2002: £7.3 million).

•       Earnings per share 14.44p (2002: 9.48p).

•       Interim dividend increased by 12% to 4.75p (2002: 4.25p).

•       Additional term banking facilities were arranged to cover the Group's
        projected cash requirements for the medium-term.  Net borrowings at 30 
        June were £18 million with interest covered 22 times.

John Morgan, Executive Chairman, commented:


'During a period of less than certain trading conditions we have again
demonstrated the benefits of our portfolio of businesses.  The investment in
public sector operations is now providing the fastest growth within the Group
and this profile of work will result in higher second half volumes. '



                                                                  11 August 2003

ENQUIRIES:


Morgan Sindall plc                                 Tel: [phone]
John Morgan, Executive Chairman
Paul Smith, Chief Executive
John Bishop, Finance Director

College Hill                                       Tel: [phone]
Kate Pope



                              MORGAN SINDALL PLC
             Interim Results for the six months ended 30 June 2003

                              Chairman's Statement



The Group has started the year well, current trading is satisfactory and work
opportunities are at reasonable levels. Turnover for the six months ended 30
June 2003 was £559m and profit before tax and goodwill amortisation was £10.4m
(2002: £515m and £7.3m respectively).  Earnings per share for the period
increased to 14.44p (2002: 9.48p).



The overall growth in Group turnover compared to last year reflects how the
Group's exposure to public sector work has outweighed the slow down in the
private sector. The substantial increase in profits is attributable to the
return to profit of our Construction division which recorded losses last year as
it was restructured. With both Infrastructure Services and Affordable Housing
looking to produce stronger second half performances as a result of contract
starts and phasing, the Group is in line to achieve its full year objectives.



At 30 June 2003 the Group had net borrowings of £17.8m (2002: net cash of
£3.2m), partly due to the final payment under the Pipeline Constructors Group
acquisition and partly to the planned increase in investment in Affordable
Housing. With increased opportunity in this division it was anticipated that the
Group's cash profile would continue to require a greater level of external
borrowings than in previous years. Consequently the Group has arranged
additional term banking facilities which cover the Group's projected
requirements for the medium term.


In light of the good start to the year the Board has decided to increase the
interim dividend to 4.75p (2002: 4.25p).


Divisional Reviews

Construction

Turnover for the division for the six months reduced again to £153m (2002:
£167m) in line with our stated policy of ensuring the division focuses on
specific market segments where the division has recognised skills.  Evidence
that this planned approach is succeeding came with Bluestone's appointment as
preferred partner in two of the 25 year NHS Local Improvement Finance Trust (NHS
LIFT) initiatives and its short listing on a further six.  Whilst the full
benefits of the restructuring programme will take time to further improve the
bottom line, the division did achieve a modest operating profit in the first
half of £179,000 (2002: operating loss of £4.0m).



Fit Out

In a difficult market with continuing weak occupational property demand Fit Out
results are highly satisfactory. Turnover of £101m was less than the £115m in
the comparable period last year but was significantly better than the £78m
turnover in the second half of 2002. Operating profit of £4.8m (2002: £6.2m)
reflects a margin of 4.7%, which not only reflects the strength of the brand but
also the swiftness of management action in rebalancing overheads when volumes
reduce.


Infrastructure Services

Morgan Est produced good results for the first half with record turnover of
£177m and operating profit of £3.4m (2002: £126m and £2.5m respectively). Across
the range of its activities the division has been busy, the tunnelling business
particularly at Terminal 5 Heathrow, the civils business on both the Channel
Tunnel Rail Link and the Newport Relief Road. Similarly both the water and
utilities businesses have been expanding as clients continue to outsource work
in larger packages to contractors who can deliver a wider range of expertise.



Affordable Housing

Affordable Housing is operating in the most rapidly growing of our market
segments as a result of increased governmental commitment to improving housing
stock, and Lovell's order book has increased from £565m to a record £735m.
Turnover for the six months was £118m (2002: £102m) and operating profit was
£2.7m (2002: £2.6m), however the timing and phasing of contracts will result in
a much stronger performance in the second half.  Whilst increased levels of
activity require additional funding the mixed tenure projects enable us to keep
this investment to acceptable levels.



Board

Paul Smith joined the Group in March 2003 as Chief Executive. He has a
successful management track record and strengthens the head office team.  Paul
and I bring complementary skills to the Group and together we will provide
strategic and operational leadership to develop the Group further.


Outlook

The Group is clearly well represented in four distinct construction areas,
providing us with a balanced mix of businesses and market exposures. Within
these growing markets we have strong leadership positions, enabling us to create
and exploit potential opportunities, even during less than certain trading
conditions.


Approximately 60% of our work comes from the expanding public sector in mostly
high priority areas and we believe that this offers significant opportunities.


With a strong Group order book of £1.4bn, we are confident of achieving an
improved second half and remain committed to expanding the business as we go
forward.

                                                                     John Morgan
                                                              Executive Chairman
                                                                  11 August 2003



                                  MORGAN SINDALL PLC
               Interim results for the six months to 30 June 2003



                         Group Profit and Loss Account
               for the six months ended 30 June 2003 (unaudited)




                                                          Unaudited             Unaudited               Audited
                                                      Six months to         Six months to               Year to
                                                          June 2003             June 2002         December 2002
                                                             £'000s                £'000s                £'000s

Turnover
Continuing operations                                        560,055              515,653             1,040,646
Less share of joint venture turnover                            (934)                (939)               (2,259)
Group turnover (note 1)                                      559,121              514,714             1,038,387
Cost of sales                                               (510,911)            (472,948)             (942,782)
Gross profit                                                  48,210               41,766                95,605
Administrative expenses                                      (39,448)             (36,296)              (80,672)
Other operating income                                           376                  363                   758
Operating profit from continuing operations (note1)            9,138                5,833                15,691
                                                            

Share of profits of joint venture                                138                  164                   603
Net interest payable                                            (401)                (132)                 (764)
Profit on ordinary activities before taxation                  8,875                5,865                15,530

Tax charge on ordinary activities (note 2)                    (2,929)              (1,967)               (5,138)

Profit on ordinary activities after taxation                   5,946                3,898                10,392
Dividends on equity and non-equity shares (note 6)            (2,006)              (1,761)               (6,254)

Retained profit for the period                                 3,940                2,137                 4,138

Earnings per ordinary share (note 3)                           14.44p                9.48p                25.32p

Diluted earnings per ordinary share                            14.26p                9.27p                25.00p



                                     MORGAN SINDALL PLC
                     Interim results for the six months to 30 June 2003



                                     Group Balance Sheet
                                 at 30 June 2003 (unaudited)




                                                            Unaudited            Unaudited               Audited
                                                            June 2003            June 2002         December 2002
                                                               £'000s               £'000s                £'000s

Fixed Assets

Intangible assets                                              52,890               54,601                54,395
Tangible assets                                                13,087               19,986                21,308
Share of joint venture gross assets                            37,750               22,861                31,771
Share of joint venture gross liabilities                      (33,483)             (21,097)              (27,287)
Investment in joint ventures                                    4,267                1,764                 4,484
Investments                                                     1,337                1,334                 1,337
                                                               71,581               77,685                81,524
Current Assets
Stocks                                                         68,587               47,515                49,644
Debtors                                                       212,112              192,321               176,491
Cash at bank and in hand                                            -                3,235                 6,849
                                                              280,699              243,071               232,984
Creditors: amounts falling due within one year               (277,167)            (254,172)             (243,657)
Net current assets/(liabilities)                                3,532              (11,101)              (10,673)

Total assets less current liabilities                          75,113               66,584                70,851

Creditors: amounts falling due after more than one
year                                                             (741)                (599)                 (571)
                                                              
Net assets                                                     74,372               65,985                70,280


Capital and reserves

Called up share capital                                         2,709                4,997                 3,646
Share premium account                                          25,464               22,997                24,375
Revaluation reserve                                             3,994                4,627                 6,941
Profit and loss account                                        42,205               33,364                35,318

Total shareholders' funds                                      74,372               65,985                70,280


Shareholders' funds are attributable to:
Equity shareholders' funds                                     73,749               63,021                68,696

Non-equity shareholders' funds                                    623                2,964                 1,584
                                                               74,372               65,985                70,280



                                   MORGAN SINDALL PLC
               Interim results for the six months to 30 June 2003




  
                               Group Cash Flow Statement
                   for the six months ended 30 June 2003 (unaudited)


                                                          Unaudited             Unaudited                Audited
                                                      Six months to         Six months to                Year to
                                                          June 2003             June 2002          December 2002
                                                             £'000s                £'000s                 £'000s

Net cash (outflow)/inflow from operating
activities (note 4)                                         (11,065)              (12,273)                   630

Dividend received from joint venture                            355                     -                      -

Returns on investments and servicing of finance
Interest received                                             1,287                   445                    821
Interest paid                                                (1,668)                 (569)                (1,557)
Dividends paid to preference shareholders                       (45)                  (83)                  (128)
Interest paid on finance leases                                 (33)                  (33)                   (56)
                                                               (459)                 (240)                  (920)


Taxation
Corporation tax paid                                         (2,384)               (3,322)                (6,349)

Capital expenditure and financial investment
Payments to acquire fixed assets                             (1,544)               (1,880)                (5,282)
Receipts from sale of fixed assets                            1,411                   186                    416
Payments to acquire fixed asset investments                       -                   (32)                  (103)
                                                               (133)               (1,726)                (4,969)

Acquisitions and disposals
Purchase of subsidiary undertakings                          (6,802)              (10,109)               (10,606)
Net cash acquired                                                 -                   506                    506
                                                             (6,802)               (9,603)               (10,100)

Equity dividends paid                                        (4,479)               (4,067)                (5,755)

Net cash outflow before financing                           (24,967)              (31,231)               (27,463)

Financing
Issue of share capital, net of expenses                         152                   105                    132
New finance leases/(capital element of finance                  183                  (278)                  (459)
leases)

Net cash inflow/(outflow) from financing                        335                  (173)                  (327)
activities

Decrease in cash (note 5)                                   (24,632)              (31,404)               (27,790)



                                   MORGAN SINDALL PLC
                    Interim results for the six months to 30 June 2003


                        Statement of Movements in Shareholders' Funds
                      for the six months ended 30 June 2003 (unaudited)



                                                         Unaudited              Unaudited                Audited
                                                     Six months to          Six months to                Year to
                                                         June 2003              June 2002          December 2002
                                                            £'000s                 £'000s                 £'000s

Opening shareholders' funds                                 70,280                 63,743                 63,743
Retained profit for the period                               3,940                  2,137                  4,138
Options exercised                                              152                    105                    132
Unrealised loss on deemed disposal of joint
venture interest                                                 -                      -                    (47)
Share of joint venture revaluation surplus                       -                      -                  2,314
Closing shareholders' funds                                 74,372                 65,985                 70,280





                                      MORGAN SINDALL PLC
                     Interim results for the six months to 30 June 2003


                                     Notes (unaudited)

1.       Analysis of turnover and operating profit


                                        Unaudited six months to             Unaudited six months to
                                                      June 2003                           June 2002

                                                       Profits/                           Profits/
                                        Turnover       (losses)           Turnover        (losses)
                                          £'000s         £'000s             £'000s          £'000s

Construction                             152,632            179            167,138          (3,965)
Fit out                                  101,146          4,783            114,687           6,200
Infrastructure services                  177,352          3,437            126,125           2,509
Affordable housing                       117,991          2,672            102,012           2,585
Group activities                          10,000         (1,933)             4,752          (1,496)
                                         559,121          9,138            514,714           5,833



2.       Taxation

         Taxation on current period profits is charged at 33% being the
         estimated effective rate of taxation for the year.


3.       Earnings per share


         The calculation of the earnings per ordinary share is based on the
         weighted average number of 40,865,000 ordinary shares in issue during 
         the period and on the profit for the period attributable to ordinary 
         shareholders of £5,901,000.


         In calculating the diluted earnings per ordinary share, earnings are   
         adjusted for the preference dividend of £45,000 giving adjusted 
         earnings of £5,946,000.  The weighted average number of ordinary shares 
         is adjusted by 631,000 for the dilutive effect of the convertible 
         preference shares, by 114,000 for share options and by a further 94,000 
         for contingent awards under the Long Term Incentive Plan giving an 
         adjusted number of ordinary shares of 41,704,000.


4.       Reconciliation of operating profit to net cash (outflow)/inflow from
         operating activities


                                              Unaudited             Unaudited                 Audited
                                          Six months to         Six months to                 Year to
                                              June 2003             June 2002           December 2002
                                                 £'000s                £'000s                  £'000s

Operating profit                                  9,138                 5,833                  15,691
Depreciation of tangible fixed
assets                                            1,923                 2,096                   4,069
Amortisation of goodwill                          1,505                 1,470                   3,116
Profit on sale of fixed assets                     (624)                  (43)                   (166)
Increase in stocks and work in
progress                                        (11,881)               (9,648)                (11,292)
Increase in debtors                             (35,615)              (21,434)                 (5,480)
Increase/(decrease) in creditors                 24,489                 9,453                  (5,308)
Net cash (outflow)/inflow from
operating activities                            (11,065)              (12,273)                    630



5.    Reconciliation of net cash flow to movement in net debt


                                                                  Unaudited                   Audited
                                                                 Six months                   Year to
                                                               to June 2003             December 2002
                                                                     £'000s                    £'000s

Decrease in cash                                                    (24,632)                  (27,790)
Cash flow from (increase)/decrease in finance leases                   (183)                      459
Change in net funds resulting from cash flows                       (24,815)                  (27,331)
Finance leases acquired with subsidiary undertaking                       -                      (407)
Loan notes redeemed/(issued on acquisition)                           6,802                    (7,161)
Change in net funds                                                 (18,013)                  (34,899)
Net (debt)/funds at start of period                                  (1,114)                   33,785
Net debt at end of period                                           (19,127)                   (1,114)


6.  Interim dividend


    The interim dividend of 4.75p per share (2002: 4.25p) will be paid on
    10 September 2003 to shareholders on the register at 22 August 2003.  The
    ex-dividend date will be 20 August 2003.



7.  The results for the half years ended 30 June 2003 and 2002 and the
    balance sheets as at those dates have not been audited and do not constitute
    statutory accounts.  The figures for the year ended 31 December 2002 are an
    abridged version of the Group's statutory accounts for that year which 
    received an unqualified audit report and which have been filed with the 
    Registrar of Companies.



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