Balfour Beatty suffers £199m loss

Aaron Morby 9 months ago
Share

Balfour Beatty suffered a £199m pre-tax loss last year as UK legacy contracts continued to blow a hole in overall group performance.

Leo Quinn Balfour Beatty
Chief executive Leo Quinn says Balfour is well on track at the halfway point of his two-year recovery programme

Despite extra exceptional losses, which were up £49m from those revealed at the half-year, chief executive Leo Quinn said Balfour Beatty was well on track with its two-year transformation programme at the half-way stage.

In the second half of 2015 Balfour managed to deliver a £14m operating profit for the first time in several years.

During the year Quinn said Balfour Beatty had focused on cost savings, cutting 846 backroom staff, which helped to deliver annualised savings of £60m from the 2016 target of £100m.

Overall group turnover slipped 4% to £8.4bn, while net cash dropped from £260m to £163m.

Improved controls on bidding combined with the decision to withdraw from certain types of work in London and the Middle East, saw the group order book slide 4% in 2015 to £11bn, with UK construction forward orders down 17%.

The total loss from the UK construction business including provisions on several historic contracts that suffered schedule slippages and operational deterioration as well as non-underlying Engineering Services contracts was £195m (2014: £317m).

Balfour Beatty trading divisions
Profit 2015* Profit 2014* Turnover Turnover
Construction Services
UK £187m loss £229m loss £2bn £2.35bn
US £22m loss £29m £3.1bn £3bn
Rail £5m loss £6m loss £274m £368m
Mid East £34m loss £15m loss £197m £197m
Far East £19m £12m £796m £686m
Total £280m loss £391m loss £6.6bn £6.95bn
Support services £24m £50m £1.26bn £1.27bn

*continuing operations

He said the business was making good progress working through legacy contracts, with 60% now complete, up from 31% or 89 projects at the half-year.

Quinn told the Enquirer: “By the end of 2016, the number of these projects at practical or financial completion is still expected to be greater than 90%.

“In its first year, Build to Last has achieved significant progress in transforming Balfour Beatty,” he said.

 “Our main markets are providing a positive backdrop, so that with stronger governance we can both win and deliver business on the right terms. Looking to the future, we are investing to maintain Balfour Beatty’s expertise and assets.

“By the end of 2016 we will achieve our Phase One targets: our costs are coming down, our cash flow has improved substantially and we expect to reinstate our dividend later this year.

“Over the following 24 months, I am confident we can reach industry-standard margins. But above all, Build to Last is putting in place the foundations to build a Balfour Beatty with market leading strengths and performance over the longer term.”

 

Latest news

Contractor to be replaced at £200m Liverpool Chinatown site

Bilt Group being removed from developer North Point Global's sites
1 day ago

Construction buyers report surge in workloads

But material price rises hit five-year high
1 day ago

Sparks set to blockade Crossrail site

Industrial relations row with Crown House escalates
1 day ago

Lidl unveils £70m Doncaster warehouse plan

Construction to start next year at the iPort site in Rossington.
1 day ago

Berkeley profits soar despite 20% drop in buyers

Stamp duty hike hitting reservations but house builder sets new £3bn profit target
1 day ago

Bidding to start for £30m Lancaster Uni upgrade

Management School will be redeveloped next year
1 day ago

Graham wins £134m Aberdeen hospital project

Work will start on two healthcare facilities in 2018 at the Foresterhill Health Campus
2 days ago

Betting Spy: Chelsea look a big price to beat Man City

Blues worth backing at 5/2 while West Ham are well and truly in a relegation dogfight
2 days ago

Laing O’Rourke jv wins £350m Metrolink Trafford extension

Work to start in late January on 5.5km Metrolink Trafford Park line
2 days ago

Heathrow names seven firms for airport design

Amec Foster Wheeler, Arup, Atkins, Grimshaw, Mott MacDonald, Jacobs and Quod form expansion team
2 days ago

Dandara wins funding for three major PRS schemes

High rise projects in Manchester, Leeds and Birmingham to provide 2,000 rented homes
2 days ago

Electricians down tools on Crossrail site

60 Crown House sparks "cabin-up" as latest row erupts on job
3 days ago

Watkin Jones to start 24-floor Cardiff student tower

City centre Bridge Street scheme forward sold allowing building start
2 days ago

Plans in for £150m Assembly Bristol scheme

Property investor AXA plans to start work next year on Temple Quay scheme
2 days ago

Scientists plan “living lab” office to monitor worker health

BRE to refurb office block to run real life tests on impact of building products
2 days ago

Merged housing association giants plan 50,000 homes

Affinity Sutton and Circle Housing double construction plans
2 days ago

Green light for major London city office rebuild

60 London Wall building will be stripped back to steel frame for redevelopment
2 days ago

Highways England to replace Amey in Areas 6 and 8

Highways England and Amey part ways by mutual consent in eastern England
3 days ago

Hard Brexit will cost construction 215,000 workers

Skills gap could become a "skills gulf" as influx of EU workers slows down
4 days ago

R G Carter wins £23m Luton science block

University of Bedfordshire goes ahead with STEM building in Luton town centre
3 days ago

ISG set for £60m Westminster City Hall revamp

Work to start early next year on the two-year tower overhaul project
3 days ago

Bristol Uni plans £300m campus in Temple Quarter

Derelict former mail sorting office site to be transformed
3 days ago

Keltbray to expand sheet piling nationwide

Northern office now planned following move into Scotland
3 days ago

McMullen lands facade package for Google office block

Carillion awards subcontract for latest office block at King's Cross
3 days ago

Breedon expands in the north with £16m acquisition

Breedon bolts on cement import facilities with Sherburn Minerals deal
3 days ago

Chinese firm signs £85m deal to start on Manchester site

BCEG agrees construction contract for first phase of Middlewood Locks development
4 days ago

Sir Robert McAlpine bags Big Ben tower revamp

McAlpine secures pre-construction contract for £23m Elizabeth Tower restoration
4 days ago

London Mayor targets 90,000 lower cost homes

Capital's planning rules relaxed to encourage build to rent schemes
4 days ago

BAM drafted in for Hub South East framework

BAM joins Morrison and Graham as Scottish Hub gears up for expansion
4 days ago

Willmott Dixon splits into three sister businesses

Shake-up will allow residential business to seek new minority investor
5 days ago

Contractor services

Most read