Balfour Beatty UK construction arm returns to profit

Grant Prior 3 months ago
Share

UK Construction is back in profit for Balfour Beatty as the company’s turnaround plans continue to pay dividends.

Full year results for 2017 show UK Construction made a £16m profit compared to a £65m loss last time.

The figures do not include a raft of non-underlying items which the Balfour board has decided to account for separately.

These include a £44m provision on the Aberdeen Western Peripheral route where Balfour had to step in following the collapse of Carillion.

Other items include £12m of restructuring costs and an £18m gain on the disposal of Heery International.

Problem contracts which caused Balfour’s financial problems are mainly worked through now with 93% of the legacy jobs complete at the end of 2017.

The company said: “The Group is continuing to manage problem contracts through to completion. Each requires a high level of leadership involvement to ensure the best achievable outcome and a positive effect on customer relations.

“In most cases, the positions taken are proving adequate, reflecting, as expected, a mix of projects successfully closed out ahead of expectation, as well as others where the outcome, although disappointing, is being managed to its best conclusion.

“A very limited number of contracts have disappointed outside of this expectation.

“The largest of these is Aberdeen Western Peripheral Route which has experienced ongoing schedule and cost issues.

“These contracts have impacted the underlying results of Construction Services.”

Group results show an overall underlying pre-tax profit of £165m, more than doubled from £62m previously on turnover steady at £8,234m from £8,215m.

Balfour said it is on track to return to margins of 2-3% in UK Construction by the end of this year compared to last year’s level of 0.8%.

Balfour’s balance sheet improved with net cash of £335m at the year end following improved performance and a series of sales of stakes in the M25 Connect Plus consortium.

Leo Quinn, Group Chief Executive, said: “These results clearly demonstrate that our Build to Last programme is transforming Balfour Beatty.

“The Group has been repositioned to drive sustainable growth in profits, underpinned by a strong balance sheet.

“It has the right culture and capabilities to capitalise on the rising tide of infrastructure spend in our chosen markets.

“As a result of Build to Last, and the governance and controls now in place, we remain on track to achieve industry-standard margins in the second half of 2018.

“In the medium term, we are building a Group capable of delivering market-leading performance.”

Latest news

Multiplex bags £400m New Scotland Yard redevelopment

Multiplex will to start six-tower Westminster Broadway scheme in January
4 hours ago

Balfour Beatty fined £500,000 for white finger exposure

Court hears how workers were exposed to hand-arm vibration for nine years
7 hours ago

McLaren lands new HQ for consultant Dar Group

John F Hunt to start demolition work in August to make way for new nine-storey scheme
12 hours ago

On-site training boost to ease skills shortages

New £22m Construction Skills Fund now open for applications
9 hours ago

Chandler promoted to Wates board

Wates MD, Paul Chandler, ushers in nearly £3bn of new business
10 hours ago

Legal firm moves into cost consultancy

Blake Morgan hires former Aecom director to head project management and cost consultancy
10 hours ago

Fire destroys Kier restoration of Glasgow School of Art

Second major blaze in four years reduces £35m of repair work to ashes
2 days ago

Race starts to build £20m Basildon cinema complex

Basildon town centre’s planned East Square cinema complex up for grabs
15 hours ago

One in four MPs now back retention reform

Aldous Bill second reading delayed to October
15 hours ago

Late payment delays hit 42 days for subcontractors

Firms waiting longer for money despite raft of initiatives to speed up payment
15 hours ago

Mace wins £90m Tunbridge Wells civic centre complex

Mace to agree final design and build price in April 2019 on theatre and civic offices
1 day ago

Caledonian wins £27m haul of MoD orders

Modular specialist ramps up production for MoD Lyneham and Worthy Down projects
15 hours ago

Forrest bags fifth X1 scheme at Chatham Docks

£58m Chatham Waters build to rent blocks get underway
16 hours ago

Mace slims down construction divisions

Former Carillion operations boss to head Mace major projects arm
4 days ago

Subcontractors write-off £2.8bn in bad debts every year

Average firm hit by £16,000 annually in unpaid bills
4 days ago

Pochin’s hires ex-Balfour boss to head construction arm

Jon Adams appointed managing director of Pochin Construction
4 days ago

Wates scoops £150m Birmingham office scheme

Work to start on phase one of Axis Square city centre scheme in February
4 days ago

Faulty tower scaffold led to fatal roof fall

Court hears how a catalogue of mistakes led to death plunge
4 days ago

UCL East starts race for £90m student blocks

Bidding starts for Queen Elizabeth Olympic Park student accommodation
4 days ago

Firefighters and sprinklers contain tower block blaze

Fire breaks out in London 20-storey block of flats on Grenfell anniversary
5 days ago

Heating engineer wins landmark workers rights battle

Pimlico Plumbers boss warns industry faces "tsunami" of self-employed claims
5 days ago

Network Rail ordered to spend an extra £1bn on renewals

Rail watchdog wants more spent replacing worn out rails and smoother spend over CP6
5 days ago

Site cleaners and chefs will no longer need skills cards

CSCS to phase out visitor cards for non construction staff
5 days ago

Costain moving to bigger construction technology centre

Contractor continues to ramp up investment in tech innovations
5 days ago

Green light for £150m Crawley mixed-use regeneration

Tenders due back this month for Crawley town centre rebuild
5 days ago

Wates on the hunt for South West subcontractors

Meet the Buyer event next month: Register now
5 days ago

Problem job sees Multiplex profit slump to £4.4m

Order book rises to £4.2bn on back of major tower projects
6 days ago

Boost your online presence – join the new Enquirer Directory

New site for suppliers and buyers will showcase their products, services and latest stories
2 months ago

Interserve sees shareholder revolt over chief’s pay

More than 17% of shareholders vote against executive remuneration report
6 days ago

Gatwick ramps up five-year spend to £1.1bn

Total investment since airport changed hands rises to £3.14bn
6 days ago

Contractor services