Morgan Sindall has upgraded its 2026 profit outlook after a strong start to the year, with its core construction and fit-out arms driving performance well ahead of expectations.

The group said full-year pre-tax profit will now come in “significantly ahead” of previous forecasts, boosted by rising activity levels and improved visibility across its order book.

Fit-out is leading the charge, with profits now expected to push beyond the top end of its £80m–£100m medium-term target range as preferred bidder schemes convert at pace and confidence builds across the commercial office market.

Construction is also outperforming, with revenues now tipped to hit around £1.4bn and operating margins expected at the top end of the 3.0%–3.5% target range.

The uplift has been driven by tight cost control, disciplined project delivery and a strong pipeline of secured and near-term work.

The infrastructure division remains steady, with margins also expected at the upper end of guidance, supported by ongoing framework activity, although revenue expectations are unchanged.

Housing remains the weaker spot. Partnership Housing is now expected to deliver only modest profit growth on last year’s £42m as wider economic uncertainty continues to dampen buyer sentiment, despite an improvement in sales rates in the early part of the year.

Mixed Use Partnerships is holding guidance, with 17 schemes set to start on site across 2026 as the business focuses on delivery.

Cash generation continues to strengthen, with average daily net cash rising to £445m in the period to mid-April, up from £372m a year earlier.

Full-year cash is still expected to exceed £400m, a record for the construction group.