Worried? Not quite yet.
Credo’s optimism in the face of the gloom in the papers is not based on the fortunes of its in-house share club, whose fresh disaster last quarter saw it switch, like a Jim Carry/ Jeff Daniels movie, from banks to housebuilders…
Instead our optimism has been based on the performance of our clients and the business and support services sector. Some sectors have been hit hard; others powered ahead. That’s not a recession, it’s a periodic adjustment.
So, as Balfour Beatty, Serco and other sector blue chips have continued to fare well, we’ve kept our cool. That’s why Morgan Sindall’s pessimism is a little troubling.
Predictably, John Morgan talked down the prospects of his ‘open market’ housebuilding operations - but these are just £100-150m or so of MS total revenue. More worryingly for his investors, he also pointed to ’softening’ in office fit-out. Here, in Morgan Lovell and Overbury, the firm has £500m of sales and acts as an indicator of broad commercial office market activity. A slowdown here is more worrying.
We’ve not joined the pessimists yet - Morgan Sindall’s fit out operations are focused on the South East and, we’d guess, disproportionately dependent on financial services - but it does leave our optimism less well-underpinned than before.
