REG - Morgan Sindall Grp - Annual Financial Report
20/03/2025 14:15
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RNS Number : 5444B Morgan Sindall Group PLC 20 March 2025
Morgan Sindall Group plc ('the Company')
Annual Financial Report
20 March 2025
Further to the release of the Company's Preliminary Results announcement on 26
February 2025, the Company announces that it has today published and issued to
shareholders the 2024 Annual Report and Accounts ('Annual Report'), Notice of
Annual General Meeting 2025 and Form of Proxy. In addition, it has published
its 2024 Responsible Business Data Sheet, 2024 Gender Pay Gap Report and 2024
Modern Slavery and Human Trafficking Statement. The following documents can be
downloaded from the Company's website:
· 2024 Annual Report -
https://www.morgansindall.com/investors/reports-and-presentations
(https://www.morgansindall.com/investors/reports-and-presentations)
· Notice of Annual General Meeting 2025 -
https://www.morgansindall.com/investors/annual-general-meeting
(https://www.morgansindall.com/investors/annual-general-meeting)
· 2024 Responsible Business Data Sheet -
https://www.morgansindall.com/investors/reports-and-presentations
(https://www.morgansindall.com/investors/reports-and-presentations)
· 2024 Gender Pay Gap Report -
https://www.morgansindall.com/investors/governance
(https://www.morgansindall.com/investors/governance)
· 2024 Modern Slavery and Human Trafficking Statement -
https://www.morgansindall.com (https://www.morgansindall.com)
The Annual Report has been prepared using the single electronic reporting
format required by the Transparency Directive Regulation. The Annual Report
2024, Notice of Annual General Meeting and Form of Proxy in unedited full text
have been submitted to the Financial Conduct Authority's national storage
mechanism ('NSM') and will shortly be available via the NSM website
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
The Company will hold its Annual General Meeting (AGM) at 10.00am on Thursday,
1 May 2025 at the offices of Morgan Sindall Group plc, Kent House, 14-17
Market Place, London W1W 8AJ.
We are looking forward to seeing shareholders at the AGM in person. The
Company will notify shareholders of any changes to the AGM via a Regulatory
Information Service and on the AGM page of the Company's website. We
encourage shareholders who cannot attend the meeting to submit any questions
on the business of the AGM in advance of the meeting by email to
cosec@morgansindall.com (mailto:cosec@morgansindall.com) (marked for the
attention of the General Counsel & Company Secretary). We will endeavour
to publish (on an anonymised basis) any questions received before 10.00am on
Tuesday, 29 April 2025 and our responses to those questions on our website
prior to the AGM. Following the AGM, we will publish on our website (on an
anonymised basis) the full set of questions received including those received
after 10.00am on Tuesday, 29 April 2025 and our answers to those questions.
However, we reserve the right to edit questions or not to respond where we
consider it appropriate, taking account of our legal obligations.
In accordance with the requirements of Rules 4.1 and 4.1.8 of the Disclosure
Guidance and Transparency Rules, a description of the principal risks and
uncertainties affecting the Group is set out in Appendix 1 to this
announcement. The Company's Preliminary Results announcement released on 26
February 2025 contained all other information required by DTR 6.3.5.
ENQUIRIES:
Morgan Sindall Group
plc
Tel: 020 7307
9200
Helen Mason, General Counsel & Company Secretary
Appendix 1
We have a clear governance framework in place for managing risk throughout
our operations. Our risk governance model ensures that our principal risks
and robust internal controls are under regular review at all levels.
Our operational teams are highly skilled in their fields and valued for their
ability to identify and manage the risk embedded in our day-to-day operations.
Their mix of knowledge and experience is a valuable resource at all key
stages, from project selection, through bidding to project delivery. A
detailed system of delegated authorities allows our people the ability to
perform while at the same time being responsible and accountable for their
actions. Our senior management teams at divisional and Group level, aided by
our internal reporting process, maintain oversight to ensure that all
decisions and actions remain in line with our expectations and risk appetite.
Principal risks
Our principal risks are those we consider the most significant in terms of
potential impact to the business and have been extensively reviewed.
In its annual review of the Group's risk appetite, the Board noted that our
markets remain structurally secure. Our business model is supported by
increased levels of public investment confirmed in the Autumn Budget,
particularly in affordable housing, town regeneration, critical
infrastructure, schools, health and other construction-related activity. The
Board also noted the easing of inflation and a more predictable and manageable
trading environment. However, uncertainty remains around interest rates
(albeit likely to keep falling), the change in government could impact
consumer confidence particularly in the housing market, and supply chain
solvency issues continue to elevate certain risks towards the upper end of our
appetite. The Group's current strategy is well suited to deal with these
issues but, given their fluidity, the Board will closely monitor the situation
during 2025 and take appropriate action should the need arise.
Strategic risk
A. Economic change and uncertainty
Public sector spending commitments, as confirmed in the Autumn Budget,
continue to support our business model. Prior headwinds have continued to
ease, with inflation stabilising and some positive progress in the trajectory
of interest rates, and the economy, households and businesses remaining
resilient. We believe the diversity of our operations, quality and volume of
our pipeline of opportunities, and secured short- and medium-term workload
will provide a level of insulation against any specific adverse market
conditions where they occur
Risk description Update on risk status Mitigation Change in risk
There could be fewer or less profitable opportunities in our chosen markets, · Sustained operational delivery, a high-quality order book and a · Our business model is designed to provide a mix of earnings across Stable
including a decline in construction activity caused by macroeconomic shifts. strong balance sheet underpin our competitive position in our sector and give different market cycles. The diversity of our operations protects against
confidence to our clients, employees and supply chain. fluctuations in individual markets while our decentralised approach enables
our divisions to respond quickly to change.
· In a volatile market, our strong balance sheet allows us to remain
Responsibility
Allocating resources and capital to declining markets or less attractive agile, continue to take long-term decisions and respond to opportunities. · The Board regularly reviews the economic environment to assess
opportunities would reduce our profitability and cash generation.
whether any changes to the outlook justify a reassessment of our risk appetite The Board
· The government is continuing to invest in areas that complement our or business model.
strategy, including affordable housing, education, health, critical
infrastructure and town regeneration. · We stress-test our business plan against the current economic outlook
to ensure our financial position is sufficiently flexible and resilient. Strategic priority
· We are strategically focused on a high-quality order book underpinned · Increase our quality of earnings
by a strong balance sheet and financial strength.
· Secure long-term workstreams
· A high proportion of our secured workload is with public sector and
regulated entities via long-term arrangements, with a healthy level of demand · Maintain a strong balance sheet
and typically preferential terms.
· We continue to be very selective and our procurement routes, margins,
contract terms and secured workload remain favourable.
· We use analytical software to enhance our understanding of our
medium-term pipeline quality and risk, enabling us to predict trends more
accurately and adjust our strategy in response.
Strategic risk
B. Exposure to the UK residential market
The government's additional support for the UK's housing needs continues to
complement our partnerships model and affordable housing offering. Positive
trends include the interest rate trajectory, inflation regression, mortgage
availability and the government's commitment to unlocking planning
constraints, although this is likely to take some time to resolve. The
recovery in the residential market will also be influenced by the cost of
living, future changes in interest rates and the pace at which government
commitments can be delivered.
Risk description Update on risk status Mitigation Change in risk
The UK housing sector is strongly influenced by government stimulus and · While uncertainty remains in the market, there has been some progress · A rigorous three-stage formal appraisal process is undertaken before Stable
consumer confidence. as described above. committing to development schemes and capital commitments.
· In Mixed Use Partnerships, there are short-term viability challenges · We work closely with public sector partners and government agencies
to navigate due to build cost pressures versus plateaued sales values. Our such as Homes England to secure extra development funding if required. Responsibility
Inflationary and interest rate pressures could challenge scheme viability, model allows us to work through this with our partners and, where necessary,
slowing down decision-making and project commencement. seek additional gap funding and sources of finance with better terms. We · We use less speculative, risk-sharing development models, subject to The Board, executive directors and divisional senior management teams
expect progress in some regeneration projects to slow but not stop. viability conditions, that lessen negative impacts from market fluctuations.
· Constrained planning will remain a frustration in the short term · On selected large-scale residential schemes, we seek to forward sell
If mortgage availability, affordability or consumer confidence is reduced, despite the government's intention to address the issue, and it has the and/or fund sections to targeted institutional investors to reduce risk. Strategic priority
this could impact on demand and make existing schemes difficult to sell and potential to delay our schemes. In the longer term, improvements in the system
future developments unviable, reducing profitability and tying up capital. will enable further efficiencies and increase the speed at which we bring · Our residential portfolio has a wide geographical spread, protecting · Increase our quality of earnings
developments forward. against regional market variations, and is geared towards providing an
affordable product. · Secure long-term workstreams
· Rather than building up a land bank, we target option agreements with · Maintain a strong balance sheet
landowners that limit and/or defer long-term exposure and boost return on
capital employed.
· We regularly monitor and forecast our pipeline of development
opportunities and secured workload, which includes monitoring key UK
statistics such as unemployment, lending and affordability.
· For a large proportion of current schemes, we have the ability to
slow (or accelerate) build rates should the need arise.
· Our partnership model provides resilience by allowing us to flex
scheme phasing, timing, tenure mix and funding structures to suit varying
market scenarios. The model can be de-risked by increasing the proportion of
contracting work in Partnership Housing, forming strategic joint ventures and
increasing the proportion of affordable units.
Operational risk
C. We cause a major health and safety incident and/or adopt a poor
safety culture
Our first priority is to protect the health and safety of our key stakeholders
and wider public. We have continued to focus on improving our safety
performance by increasing health and safety awareness and promoting safe
behaviours. Our challenge is to keep refining our approach to drive further
improvement and ensure that everyone who comes into contact with our work, on
and off site, goes home safe and well.
Risk description Update on risk status Mitigation Change in risk
Health and safety will always feature significantly in the risk profile of a · Our overall health and safety performance has improved compared to · The Board is responsible for health and safety, which is the first Stable
construction business. We carry out a significant portion of our work in previous years. However, our vigilance remains high and we continually look item on the agenda at every Board meeting. In addition, our responsible
public areas and complex environments. for ways to drive improvement even further. business committee focuses on our health and safety culture to drive better
behaviour and performance.
· In 2024, our Group protecting people forum refreshed our health and
Responsibility
safety framework to focus on the following three objectives: · Individuals in each division, and on the Board and Group management
Accidents could result in legal action, fines, costs and insurance claims as
team, are given specific responsibility for health and safety matters. The Board, Group management team, divisional senior management teams,
well as project delays and damage to reputation. Poor health and safety - to engage early on health and safety during the design and preconstruction
protecting people forum
performance could also affect our ability to secure future work and achieve stages; · Our Group protecting people forum meets regularly,
targets.
with representatives from all divisions sharing best practice and exchanging
- to be a learning organisation, by strengthening our corporate memory; and information on emerging risks.
Strategic priority
- to engage with our supply chain to improve health and safety performance. · Safety leaders from across the divisions hold monthly meetings
focusing on addressing and learning from issues and opportunities as they · Secure long-term workstreams
· We are continuing to build on our objective to create a arise.
forward-thinking and proactive health and safety culture. To support this, the
· Consistently deliver on our Total Commitments
divisions have identified and agreed a set of common 'leading indicators'. · We have well-established procedures in place including safety
These are positive and proactive actions and activities that the divisions systems, audits, site visits, incident investigation and root-cause analysis,
promote in a manner that complements their own sector requirements. We firmly monitoring and reporting, reporting of near-miss incidents and incidents that
believe that this approach will further support the improvement in our could potentially have resulted in serious injury, and reporting on the
day-to-day safety performance going forward. implementation of leading indicators.
· Our regular health and safety training includes behavioural
change, housekeeping on site, and leadership engagement in driving site
standards.
· Each division's health and safety policy is communicated to all
its employees, and senior managers are appointed to ensure the policies are
implemented.
· We have developed major incident management and business continuity
plans, which are periodically tested and reviewed.
· All divisions are accredited to ISO 45001 for occupational health and
safety.
· We continue to offer our colleagues a range of benefits that
promote physical and mental wellbeing.
People risk
D. We fail to attract and retain the talent we need to maintain and grow
the business
Our current success is helping us attract and retain people, and in the short
to medium term we are focusing on increasing the Group's diversity.
Where staff retention is challenged, this tends to be influenced by both
social and business-related issues, for example lifestyle changes, poaching
and an ageing workforce
Risk description Update on risk status Mitigation Change in risk
Skills shortages in the construction industry will remain an issue for the · Improvements continue to be made to the working environment and · We empower our people and give them responsibility together with Stable
foreseeable future. investment made in technology and leadership training. Our voluntary staff clear leadership and support.
turnover rate was 11% in 2024, compared to 12% in 2023.
· We offer them a strong Group culture and attractive benefits, working
· We are responding to the challenge of an ageing employee population environments, technology tools and wellbeing initiatives to help improve their Responsibility
If we fail to attract and retain the talent required to excel in project and undertaking work to improve our diversity and inclusion. working lives.
delivery and meet our clients' and other stakeholders' expectations, this
The Board, Group management team, divisional senior management teams
could damage our reputation and our ability to secure future work and meet our · We are considered a leader in the sector in addressing climate · We conduct employee engagement surveys and monitor joiner and
targets. emissions, which should help attract new recruits. We also offer an increasing retention metrics including voluntary staff turnover. We carry out annual
digital emphasis and improved working environments, practices and employment appraisals that provide two-way feedback on performance, and conduct exit
packages. However, it is recognised that the sector has work to do in terms of interviews when people leave. Strategic priority
being attractive and the first choice for young people.
· Our succession planning includes identifying and developing future · Secure long-term workstreams
skills.
· Excel in project delivery for our clients
· We provide training and development to build skills and experience,
such as our leadership development and graduate, trainee and apprenticeship · Consistently deliver on our Total Commitments
programmes.
Financial and operational risk
E. Partner insolvency and/or adverse behavioural change
Some partners may have been trading with stretched finances following the
pandemic, the unwind of government measures introduced to support business
recovery, and the reverse-charge VAT initiative. More recent mainstream
contractor failure and inflation and interest rate increases continue to put
further pressure on their balance sheets, leading to a greater likelihood of
failure.
Risk description Update on risk status Mitigation Change in risk
An insolvency of a key client, subcontractor, joint venture partner or · Supply chain insolvency risk has increased following some · Our business model and order book are predominantly focused Increase
supplier could disrupt project works, cause delay and incur the costs of well-publicised failures in the mainstream contractor market. on public sector and regulated industries and commercial customers in sound
finding a replacement, resulting in significant financial loss.
market sectors, reducing the likelihood of a material customer failure.
· Where supply chain failures have occurred, they have been disruptive
but manageable, with costs being absorbed at project level by utilising · We carry out rigorous due diligence preconstruction, particularly on Responsibility
contingency and/or, in a small number of instances, a reduction in margin commercial clients and key supply chain partners, including a focus on payment
which has not been material to the Group. behaviours, cash terms and profiling, and likely liquidity outcomes. The Board, Group management team, divisional senior management teams
Mitigation could include obtaining, where necessary, relevant securities in
· We have nurtured close relationships with our supply chain as part of the form of guarantees, bonds, escrows and/or more favourable payment terms,
a long-term strategy, sharing our values and desired behaviours, so that we or, in some cases, declining a project.
can provide an offering our clients can rely on.
Strategic priority
· Formal due diligence is carried out when selecting joint venture
· We use supply chain credit checks but the information is somewhat partners, including seeking protection in the event of default by one of the · Maintain a strong balance sheet
historical. Our relationships with our suppliers mean we can monitor the partners. Joint ventures require executive director approval.
situation in real time, by gaining transparency and understanding their levels
· Secure long-term workstreams
of exposure, and our operational teams are highly alert to early signs of · We work with preferred or approved suppliers where possible,
stress. This gives us a better chance of stepping in if needed. which aids visibility of both financial and workload commitments. · Deliver on our Total Commitments
· The strength of our balance sheet gives us the option of helping our · Our business model reduces the concentration of supply chain risk as
supply chain partners manage short-term issues, such as cash flow, if and as our divisions operate in different markets and geographical regions, using
deemed appropriate. local supply chains. This helps ensure we do not overstress suppliers'
finances or operational resources.
· Our strategy has been to reduce payment days and our supply chain
partners regard us as dependable and responsible. In addition, we do not hold · Our predominant negotiated and two-stage procurement routes(1) allow
any cash in the form of retention from our preferred supply chain partners, us to select supply chain partners with optimal credentials tailored to each
which helps reduce their cash flow pressures and the likelihood of failure. project, including qualitative, behavioural, resourcing and financial. This
enables predictable outcomes for the Group, our clients and our supply chain.
· We rigorously monitor work in progress, debts and retentions.
1 Negotiated and two-stage procurement routes allow us early engagement in the
project and greater visibility, influence and certainty over pricing
and programming.
Financial risk
F. Inadequate funding
We have committed loan facilities of £180m which, together with our strong
cash position, provide the Group with significant headroom.
Risk description Update on risk status Mitigation Change in risk
A lack of liquidity could impact our ability to continue to trade, or restrict · Our loan facilities of £180m were extended by one year, £165m to · We have a Group-led disciplined capital allocation process for Stable
our ability to achieve market growth or invest in partnership schemes. October 2027 (with a provision to extend to 2028) and £15m to June 2027. significant project-related capital, which takes into consideration future
requirements and return on investment.
· During the reporting period and for the foreseeable future, our
average net daily cash continues to be healthy and indicates the cash-backed · We monitor our cash levels daily and conduct regular forecasting Responsibility
nature of the business. of future cash balances and facility headroom.
Executive directors, Group tax and treasury director, divisional senior
· Our balance sheet continues to provide assurance for our stakeholders · Our long-term cash forecasts are regularly stress-tested. management teams
and allows us to continue investing in partnership schemes while remaining
selective in construction.
Strategic priority
· Maintain a strong balance sheet
Financial risk
G. Mismanagement of working capital and investments
Our strong balance sheet and cash position continue to support investment in
long-term partnership schemes and protect against economic downturn, allowing
us to make the right long-term decisions.
Risk description Update on risk status Mitigation Change in risk
Poor management of working capital and investments leads to insufficient · Our ongoing focus on working capital management has enabled us to · Our delegated authorities require that capital and investment Stable
liquidity and funding problems. maintain levels similar to prior years while continuing to maintain payment commitments are notified and signed off at key stages with senior-level
practices that are favourable to our supply chain and investment in approval.
partnerships.
· We reinforce a culture within our bidding and project teams of Responsibility
· Our cash position is not supported by any form of supply chain debtor focusing on cash returns to ensure they meet expectations.
finance and gives a clear indication of our financial health.
Executive directors, Group tax and treasury director, divisional senior
· We monitor and manage our working capital with an acute focus on any management teams
· We continue to maintain a positive momentum in cash management in overdue work in progress, debtors or retentions.
construction due to a combination of improved returns, cash optimisation and
cash conversion. · We monitor cash levels daily and produce regular cash forecasts.
Strategic priority
· Our average net daily cash for the period demonstrates our · We manage our capital on partnership schemes efficiently, for example
disciplined working capital management. through phased delivery, institutional and government funding solutions, and · Maintain a strong balance sheet
forward funding where possible.
Operational risk
H. Poor contract selectivity and/or bidding
The quality of our long-term secured workload in our predominantly public and
regulated industry sectors should safeguard our future performance, allowing
us to continue selecting the right projects. Client budgets, while more
aligned to inflation, remain stretched, which results in preconstruction
periods taking longer. We continue to maintain sensible contingency levels,
and some contracts contain mechanisms for passing through inflationary costs,
particularly on the essential and critical infrastructure work we carry out.
Risk description Update on risk status Mitigation Change in risk
In a volatile market where competition is high, a division might accept a · Our order book consists of a high proportion of public sector, · It is part of our strategy and culture to be selective in our work Stable
contract outside its core competencies or for which it has insufficient regulated industry and framework clients with typically healthier risk by targeting optimal markets, sectors, clients and projects.
resources. profiles and is secured in limited competition.
· We limit our participation in open market bids, conducting a large
· We have not changed the sectors or markets we operate in and are proportion of our projects via framework or joint venture arrangements with Responsibility
therefore unlikely to engage in a project outside of our capability. In repeat clients who share our values. This provides a high probability of
If a contract is incorrectly bid, this could lead to contract losses and an construction, the majority of our work has been secured via negotiated and predictable and successful outcomes. Executive directors, divisional senior management teams
overall reduction in gross margin. It might also damage our relationship with two-stage procurement routes.
the client and supply chain, leading to a reduction in work volumes.
· When bidding, we aim for negotiated and two-stage procurement routes
· Input cost pressures have eased with our older inflation-impacted that allow us early engagement and collaboration, including the early
projects now largely completed and newer projects benefiting from more identification of the most appropriate supply chain delivery partners. Strategic priority
realistic customer budgets and greater pricing stability in the supply chain.
· Our divisions select projects according to pre-agreed types of work, · Increase our quality of earnings
project size, contract terms and risk profile. A multi-stage process of bid
review and approval includes tender review boards, risk profiling and a system · Excel in project delivery for our clients
of delegated authorities to ensure approval at appropriate levels of
management. · Secure long-term workstreams
· We profile the skills and capabilities required for the project to · Maintain a strong balance sheet
ensure that we allocate the right people.
· Our divisions have processes in place to select supply chain
partners who match our expectations in terms of quality, sustainability and
availability.
· We conduct a robust review of our pipeline and bids at key stages,
including rigorous due diligence and risk assessment, and obtain senior-level
approval.
Operational risk
I. Poor project delivery (including changes to contracts and contract
disputes)
Our focus on project selectivity, the quality of our order book and our close
engagement with our supply chain partners helps reduce the probability of poor
performance. Inflationary pressures have eased, although stretched client
budgets, supply chain finances and any related change in behaviours could
increase the risk of disputes and/or failures. However, our longstanding
relationships and focus on customer experience help us navigate significant
issues when they arise.
Risk description Update on risk status Mitigation Change in risk
Changes to the scope of works and contract disputes could lead to costs being · Inflationary pressures have eased and newer projects are benefiting · We have well-established systems of measuring and reporting project Stable
incurred that are not recovered, loss of profitability and delayed receipt of from client budgets more aligned with the impacts of inflation; however, in progress and estimated outturns that take into account contract variations and
cash. some instances it can take time to remodel a scheme to ensure it is viable and their impact on programme, cost and quality.
this can lengthen the preconstruction period.
· The strength of our supply chain relationships and preference to work Responsibility
· There is a recognised shortfall in the construction labour market, with selected partners reduces the probability of project failure and helps to
Failure to meet client expectations could incur costs that erode profit exacerbated by impacts from Covid and Brexit. However, in the short term, ensure we deliver predictable outcomes. Executive directors, divisional senior management teams
margins, lead to the withholding of cash payments and impact working capital. while we have seen issues, we, together with our supply chain, are managing
It may also result in reduction of repeat business and client referrals. the situation. · Where legal action is necessary, we notify the Board, take
appropriate advice and make suitable provision for costs.
· We have responded to the Building Safety Act, which primarily deals
Strategic priority
with building regulations and fire safety, with Construction, Partnership · Formal internal peer risk reviews highlight areas of improvement
Not understanding the project risks may lead to poor delivery and Housing and Mixed Use Partnerships having updated their methodology to ensure and share best practice and lessons learned. · Increase our quality of earnings
could result in reputational damage and loss of opportunities. that project specifications remain compliant. This includes a complete refresh
of design management and procedures, increased on-site scrutiny and records, · Various Perfect Delivery(1) initiatives focus on improvements in · Excel in project delivery for our clients
and engagement of independent fire consultants on more complex schemes. product quality and predictability and client experience.
· Secure long-term workstreams
Ultimately, we may need to resort to legal action to resolve disputes, which · In terms of the Building Safety Act, we continue to actively engage · Regular formal and informal stakeholder feedback allows us to
can prove costly with uncertain outcomes as well as damaging relationships. with the Ministry of Housing, Communities and Local Government and have intervene when required and refine our offering to provide exceptional · Maintain a strong balance sheet
committed to rectifying issues with appropriate remedial activity which is outcomes.
being undertaken and expenditure provided for, with cash anticipated to be
expended over the next one to two years. Some of this may be recoverable, but · We continue to use and enhance our digital project management tools
will take time to resolve. and commercial metrics that highlight areas for focus and provide early
warnings, enabling early intervention in the construction cycle.
· Our divisions have worked closely with our supply chain for many
years, providing predictable workloads and prompt payment. Maintaining good
supply chain relationships has helped us navigate labour and/or materials
availability issues.
1 Perfect Delivery status is granted to Fit Out, Construction and
Infrastructure projects that meet all four client service criteria specified
by the division.
Operational risk
J. Cyber activity and failure to invest in IT
To protect against increasing cyber attacks, we invest in security controls
and partners, including liaising with government security advisers.
Risk description Update on risk status Mitigation Change in risk
Investment in IT is necessary to meet the future needs of the business in · During the year, we re-certified to ISO 27001 and the government's · We have a dedicated Group team focused on providing a stable and Stable
terms of expected mobility, growth, security and innovation. Cyber Essentials Plus Scheme. resilient IT environment with continued investment in core infrastructure,
security and applications. Our divisional IT teams focus on
· We have continued to enhance our visibility of security events and
business-specific digital transformation.
'indicators of compromise' (signs of a data breach) using the latest
Responsibility
It is also essential to avoid a cyber incident that could cause reputational technologies. In 2024, we implemented additional controls to ensure we · Our Group head of information security and compliance presents an
and operational impacts and/or a loss of data or intellectual property that continue to innovate and respond to emerging threats. update to the Board on a biannual basis to ensure oversight and challenge. The Board, Group management team, IT security steering group (reporting to the
could result in significant fines and/or prosecution.
chief financial officer)
· The Board has agreed a rolling security strategy, supported by · We adopt best practices to secure our people and data. We certify to
continuous improvement and review. This ensures we remain aware of emerging the ISO 27001 Standard and align ourselves with other appropriate frameworks.
risks and changes to the threats we face. Our IT security steering group is
Criminal activity continues to increase and, while we are confident in our provided with additional funding as needed. · We commission an external industry expert to conduct regular cyber Strategic priority
security strategy, it is continually checked and challenged.
risk analysis on every device used in our network. The data collected is
· As part of our digital resilience programme, we have continued to independent of our other security systems and acts as an audit of our · Increase our quality of earnings
run workshops hosted by industry experts to educate key stakeholders around security controls and their effectiveness.
incident response best practices, focusing on business, technical and legal
· Excel in project delivery for our clients
impacts of a major incident. We have also taken a significant step forward · We engage with industry-leading partners to adopt appropriate
with our investment in new backup and disaster recovery capability, providing technologies to protect the Group. · Secure long-term workstreams
immutability of our data and fast recovery times.
· Our IT security steering group provides governance and oversight · Maintain a strong balance sheet
· Data/business intelligence, digital construction and AI are at the of the Group's cyber strategy and strength, resources and funding.
forefront of our technology investment. To support the seamless delivery of
these new technologies, we have also delivered our next-generation, modern · We run regular audits using different parties (both technical and
data network. This both improves the security of our network and enhances non-technical) to confirm that our controls remain effective. Audit reports
access to cloud services. are shared with the IT security steering group.
· We have continued to invest in cloud platforms to expand functional · We train all our employees in data protection and information
capabilities and resilience and have prepared for the expected acceleration to security including awareness and responsibilities.
cloud-hosting away from data centres on the premises.
· We follow the National Cyber Security Centre's guidance on
third-party risk management and perform ongoing risk assessments of our
digital supply chain partners.
· Our investment in IT enables all our people to work remotely and
securely with minimal inconvenience.
Strategic and operational risk
K. Climate change
We have been recognised as leaders in our sector for our work in reducing
carbon emissions. However, there is still much to do as we progress towards
our 2045 goal of net zero.
Risk description Update on risk status Mitigation Change in risk
For detailed information on our climate change risks, mitigations and Stable
opportunities, see our 2024 annual report on our website for our Task Force on
Climate-related Financial Disclosures. Our 2024 annual report sets out our
climate governance, indicating Board oversight and management's
responsibilities. Strategic priority
· Secure long-term workstreams
· Consistently deliver on our Total Commitments
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