Balfour to save £50m a year cutting 650 jobs

Grant Prior 11 years ago

Balfour Beatty spent £14m on redundancy payouts and restructuring during the first half of this year as its efficiency drive continues which will see 650 jobs go.

UK Construction Services saw £9m in payouts as the division is streamlined from six business units to three and 650 staff will be cut from the 12,000-strong workforce as 35 offices close.

The figures were contained in half-year result to June 29 2012 released to the City today.

The restructuring and cuts will be complete by January 2013 and will cost up to £75m but will deliver £50m in annual savings to help Balfour cope with tougher construction markets.

Headline results show group revenue increased to £5.535bn from £5.222bn last time while pre-tax profits edged-up to £154m from £138m.

But things were tougher in the construction market where profit dipped to £53m from £67m despite revenue rising to £3.5bn from £3.27bn.

Construction margins also fell from 2% to 1.5% as “volume and margin pressure remain.”

Balfour said it is now adapting to a “post-Olympics” world in the UK after delivering major public projects including the Aquatics centre.

The firm said: “In the ‘post-Olympics’ world, the UK business has been focusing on replenishing the order book with more varied, smaller, often private sector projects.

“Our depth of capability across a range of end-markets is benefitting us in this regard; our UK order book and revenue have declined by 3% and 2% respectively in the first half, in a marketplace that has continued to shrink.

“Against this difficult backdrop, the cost reduction initiatives as well as good operational performance have held profitability at the expected level.

“Although the traditional building and civil markets are challenging, our diverse skill set stands us in good stead in emerging sectors.”

Balfour has sealed a series of waste treatment jobs and is waiting for the nod on three schemes worth up to £300m.

Support services saw revenue grow to £828m from £757m but profits fell to just £10m from £25m as margins dropped to 1.2% from 3.3%.

Balfour blamed the profit fall on start-up costs for new contracts and said it expects second-half margins to be more than 5.1%.

Balfour is currently bidding for the new Highways Agency Area 6 Asset Support Contract after recently winning Area 10.

Highways maintenance business “remains strong” after £90m of wins in the first half.

Chief executive Ian Tyler said: “We have delivered another set of solid results in challenging markets and remain on track to meet our expectations for the full year.

“We are making good progress on the early stages of our growth strategy in key industry verticals where our deep asset knowledge differentiates us from the competition.”





Latest news

Former Inland Homes chief to invest £2.5m in cash raise

Cash-strapped developer hopes to raise £4.6m in share sale closing today
6 hours ago

Groundworks firm Conlon saves piling specialist

Work restarts on Abbey Pynford sites after acquisition
15 hours ago

BAM Farrans JV installs Great Yarmouth bridge leaves: Video

Watch civil engineering feat in action as 770 tonne bridge leaves lowered into place
15 hours ago

Gove invites Kingspan for talks on fire safety compensation

Insulation firm urged to pay for its part in cladding crisis after unveiling record profits
22 hours ago

Galliford Try and Midgard bag 350 homes deal at Brent Cross

Galliford Try will build 249 BtR flats and Midgard 107 flats for sale
22 hours ago

Sizewell C project gains key environmental permits

Waste permits allow client NNB Generation Company to move to site investigation and construction environmental approvals
21 hours ago

Cost of Robertson school contract soars to £100m

Construction to start next month after cost jumps from original £60m
22 hours ago

House building cost inflation eases as build out rates fall

Housing cost inflation expected to grow by 1.4% this quarter
21 hours ago

Modular builder ilke Homes hires Deliveroo chief to drive profit push

David Scott charged with making business profitable
22 hours ago

£500m Leeds South Bank scheme gets green light

Leeds City Council approves plan for 1,350 flats in mixed-use South Bank development
2 days ago

Galliford Try takes rebid £150m Carlisle Southern Link Road

Main construction works are due to start on 8km road in June
3 days ago

Arup takes stake in graphene-enhanced concrete venture

New concrete additive Concretene™ promises 30% savings in CO2 emissions
2 days ago

Winners revealed on £1.42bn materials framework

Thirteen builders merchants land places on huge procurement deal for social landlords
2 days ago

Travelodge eyes plans for another 300 hotels

Hotel giant writes to local councils offering partnership deals with a £3bn investment target
2 days ago

Balfour Beatty to invest £60m in pop-up EV chargers

New Urban Fox JV will roll out 35,000 charge points across the UK over the next decade.
3 days ago

Leading Channel Isles builder goes bust

Jersey-based construction firm Camerons placed in liquidation
2 days ago

HS2 Euston needs full design reset as costs set to double

Spending watchdog warns Euston stop-start delay will simply inflate already ballooning costs
3 days ago

Worker dies on major warehouse site in Stafford

Main contractor Glencar halts work while tragedy is investigated
3 days ago

Sellar switches London flats/hotel plan for 444 student rooms

Southwark's King’s Place scheme will comprise five buildings of up to 11 storeys
3 days ago

Bid race starts for Norfolk £30m Long Stratton Bypass

Council hopes to start work on 3.9km bypass in April 2024
3 days ago

GMI to build first warehouse at £200m Teesside business park

Work to start early next month on first shed at airport business park
3 days ago

Skanska Costain Strabag JV sets up own rebar plant

HS2 team now running on-site manufacturing facility to avoid supply chain issues
3 days ago

Bid rigging: Keltbray to appeal and so could Squibb

Both contractors "disappointed" with level of fines
6 days ago

Ten demolition firms fined £60m for bid rigging

Full details of fines with Erith and Keltbray hardest hit
7 days ago

Retail contractor J M Scully files administration notice

£23m turnover Dorset based contractor lodges court notice
6 days ago

Civils specialist M Lambe delivers record performance

Housing civils specialist seeks to diversify in face of challenging housing market
6 days ago

Willmott Dixon clinches £60m Oxford Brookes University job

Preparation work starts on two new buildings at Headington Hill campus
6 days ago

Ferns seals £50m+ Openreach network services deal

Five-year south west deal to provide civils, poling and complex manhole programme
6 days ago

20 firms win £4.5bn Southern construction framework

A dozen new firms secure spots on fifth generation public sector deal
7 days ago

Call grows for bolder 18m second staircase rule for flats

Architects, surveyors and builders professional trade bodies demand lower height threshold than proposed 30m
7 days ago

Contractor services