Balfour Beatty suffers £199m loss

Aaron Morby 4 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

Workers sent home from Cardy Construction sites

£63m turnover Kent contractor files notice of intent to appoint administrator
18 hours ago

Student digs giant Unite commits to £675m pipeline

Student accommodation construction boom continues as Unite eyes London market for bargains
22 hours ago

US investor snaps up Morrison Utility Services

£600m turnover contractor bought by investor First Reserve
21 hours ago

Lindner wins £25.4m cladding package at Principal Place

Facade work to start on 50-storey resi tower in City of London next year
22 hours ago

Go-ahead for Portsmouth prison-to-homes job

Developer City & Country to create 230 homes at HMP Kingston site
21 hours ago

£60m expansion plan for Manchester biomedical hub

Construction to start next Spring on latest phase of Citylabs scheme
22 hours ago

Labourer crushed under three tonne road roller

Machine slides down steep bank and pins worker beneath it
21 hours ago

Arup to work on 21-storey resi tower made of wood

Construction to start next year on world's tallest wooden resi tower in Amsterdam
22 hours ago

CITB to fund “Robots for Roofing” research

Drone flying programme one of beneficiaries of latest CITB funding round
2 days ago

Lakehouse founder Steve Rawlings dies

Construction entrepreneur dies after short illness
2 days ago

Voting starts for the best companies in construction

Vote now for your favourite contractors, clients and suppliers
2 days ago

Shareholder moves to oust Speedy chairman

Major shareholder calls for former Crest Nicholson chairman to be parachuted in
2 days ago

BAM beefs-up site security after daredevil climbs tower crane

Urban explorers target £29m school site in Barrhead
2 days ago

Gatwick names 17 contractors on £1.2bn frameworks

Full list of winners from 127 companies who entered the tender race
5 days ago

Firms on alert for £700m South Wales Metro prequal

Transport for Wales gears up for early contractor involvement framework race
2 days ago

John Graham group revenue breaks £500m barrier

Contracting arm trebles profit as margins return to 1.8%
2 days ago

Bidders day for new £300m Surrey and Sussex framework

Plan for new Orbis framework to be outlined in September
2 days ago

ISG bags £13m Manchester Corn Exchange project

Work to start in August converting iconic grade II listed building into a hotel
2 days ago

Contractors hit by concrete block shortages

Supplies drying up as manufacturers prioritise regular construction customers
5 days ago

Building boss jailed for conning pensioner out of £150k

Contractor sentenced to three years for massively overcharging 87-year-old
5 days ago

Skanska shrugs off Brexit fears

Contractor taking a "measured and calm" approach amid post referendum uncertainty
5 days ago

D-Day for Hinkley construction next week

Contractors hoping for good news as a final decision set to be made on £24.5bn nuclear scheme
5 days ago

Vantage Design and Build collapse dents Inland Homes profit

House builder to "self deliver" homes rather than rely on contractors
5 days ago

Mears boss Bob Holt to help turnaround Lakehouse

Contractor offers rival chairman millions to lead recovery
5 days ago

H&V workers land 4.5% pay rise over next two years

"Robust" negotiations see pay deal "appropriate in the current economic climate"
5 days ago

Contractor fined £120,000 after worker sprains ankles

Builder falls 4.5 metres down service riser shaft on refurb site
5 days ago

Dunne bosses blame collapse on bankers

Insider reveals final hours of failed concrete specialist
7 days ago

Chinese construction giant to invest £1bn in Sheffield

First tranche of £220m to fund construction schemes over the next three years
6 days ago

Balfour urges Tories to borrow more to fund infrastructure

Contractor wants Government to make up any investment shortfall in wake of Brexit
6 days ago

Breedon plans post Brexit buying spree

Aggregates firm looking at more acquisitions as Hope deal completes
6 days ago