Skanska UK operating margin slides below 3%

Aaron Morby 11 years ago
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Skanska UK saw its operating margins slide to under 3% in the first three months of the year.

The performance still beats the industry average for a main contractor but is down from 3.6% for last year.

Reporting progress in the first quarter of the year, Skanska said it had booked turnover of £260m and an operating profit of £7.5m in the face of tough trading.

President and CEO Mike Putnam, said: “This is a very credible performance given the prolonged recession facing the construction industry.”

“We are well on track to achieve our financial targets for the year.”

He added: “Although our reported order bookings for the first quarter of almost £170m are behind expectations, we have a healthy pipeline of future opportunities.”

Skanska bought Atkins Highways Services in February, which is expected to complete by June, boosting its workforce by 1,250 people.

In the quarter, Skanska reported its seventh contract for Crossrail, working with Costain to deliver the £110m station at Bond Street.

Also secured was 100 Cheapside, an 18-month contract to demolish and construct a 10-storey commercial building in the City of London.

During this period, Skanska started work on the £1.6bn gas infrastructure replacement project for National Grid, working in joint venture with Morrison Utility Services.

“This involved the mobilisation of more than 3,000 people within a matter of weeks. We are now up and running, delivering works in the east of England and north London,” said Putnam.

Skanska also started work on the £321m later upgraded sections of the M25 during the quarter. Working with Balfour Beatty, the company is upgrading two sections of the M25 to managed motorway.

 

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