Quinn to purge Balfour’s ‘conspiracy of optimism’

Aaron Morby 8 years ago
Share

Balfour Beatty’s group chief executive Leo Quinn has pledged to tackle head on the “conspiracy of optimism” that pervades the business.

Quinn will spend the next five days meeting senior management teams at both the UK and US business to hammer home significant cultural issues in urgent need of change.

He said: “Balfour Beatty as a group is overly complex with an appalling cashflow.

“It suffers from poor tendering, poor control and a conspiracy of optimism.”

He told city business analysts: “We have to look at upping the level of risk contingency that goes into a job, where people feel they can do work better than they can actually do.

“There is a real tendency to hope for the best and not plan for the worst.”

Quinn said he was not surprised by any of the root causes of Balfour’s problems. “They are eminently fixable but it will take time,” he added.

He confirmed that the £200m share buy-back using funds raised from the sale of Parsons Brickerhoff had been cancelled.

The board is also in talks with pension fund trustees about deferring an £85m payment to the fund, promised at the time of the Parsons’ sale.

Balfour confirmed that the bulk of the latest £75m profit warning would impact on cashflow later this year as planned cost cuts are also expected to be implemented.

Quinn, who officially joined Balfour Beatty two and half weeks ago, said it was far to early to say where the axe will fall.

But he hinted at deep cuts ahead warning that he could not imagine they would be less than the £175m savings tabled by Carillion at the end of merger talks last year.

Quinn described Balfour’s revalued £1.3bn PPP assets business as having a “Yin and Yang” relationship with construction, which must be retained to improve the value of earning at both.

“If we have to start somewhere having £180m in net cash at the end of the year and £1.3bn of assets on the balance sheet is not a bad place to begin.”

Latest news

Civils boss banned for £200k false Covid loans

Yorkshire plant hirer and civils boss wrongly claimed bounce back loans for four firms
8 hours ago

Green light for Skanska £507m A428 dualling job

Construction is due to start at the end of this year on 16km dualling job
8 hours ago

W Stirland set for administration after nearly 100 years of trading

Family-run south coast firm has been building since 1928
22 hours ago

BAM UK delivers steady first half growth

UK profit up 16% to around £40m from revenue at £1bn
22 hours ago

Crane hirer M&M enters voluntary liquidation

Family-owned mobile crane ceases trading amid soaring costs and depressed hire rates
22 hours ago

£161m funding for Oxford Railway station revamp

Kier to deliver first project under the new Rail SPEED initiative
22 hours ago

VolkerFitzpatrick wins 240km wind farm cable job

Contractor lands connections deal from energy giant Ørsted
22 hours ago

Seddon Construction returns to profit

Plan to target more diverse work pays off as construction revenue rises 27% to £166m
22 hours ago

Faults found on giant HS2 green tunnel segments

"Quality issues" found on precast segments at HS2 site pioneering off-site construction
2 days ago

Balfour Beatty UK construction returns to profit

Group profits double to £82m in first six months after construction arm bounces back
2 days ago

Bidding starts for £4.5bn Southern Construction Framework

5th generation deal includes new £1m-£5m lot for south west
2 days ago

Persimmon expands output at off-site factories

Housing giant hits 31% profit margin with another £750m returned to shareholders
2 days ago

Modular specialist Algeco lands £31m MoD double

Construction to start this year on two new sets of army barracks
2 days ago

Hill gets go-ahead for North London estate rebuild

750 homes to be built at Douglas Bader Park estate in Colindale
3 days ago

Bid race for £210m Huddersfield town centre revamp

Kirklees Council's Cultural Heart scheme will be split into two major projects
3 days ago

£100m Darlington Station revamp enabling works start

Willmott Dixon set to deliver major station upgrade project
3 days ago

Demolition worker gets huge payout after losing leg

Compensation settlement will fund latest prosthetic limb technology for site victim
3 days ago

Plant hirer Vp abandons sale plan

Chairman Jeremy Pilkington says the plant hirer failed to find a suitable new owner.
3 days ago

Turner & Townsend on board for Sheffield Supertram upgrade

Consultant to help deliver programme over next seven years after £570m funding deal
3 days ago

Green light for new £33m Ipswich logistics park

Construction to start this October on latest Trebor Developments site
3 days ago

Piling starts on pioneering double composite HS2 viaduct

Wendover Dean Viaduct ‘double composite’ structure will halve carbon emissions
3 days ago

ISG pauses work on £300m gigaplant

Construction work rescheduled to reduce costs at giant car battery plant
4 days ago

Tory leadership battle delays bidding for HS2 phase 2a

Prequalification for £5.2bn-£7.2bn route to Crewe put back to September
4 days ago

Greswolde Construction goes under

Solihull contractor ceases trading with 24 jobs lost
6 days ago

Hanson on track for UK’s first net zero cement works

20 carbon capture projects shortlisted for £1bn funding
4 days ago

Plan in for Nottingham 967-room student scheme

Vita submits plan for second major purpose built student sh
4 days ago

Galliford Try gets go-ahead for next A47 dualling job

Early 2023 start for £200m section of A47 between North Tuddenham and Easton in Norfolk
4 days ago

Designs revealed for £1bn London Blackfriars tower blocks

Fosters design landmark green office skyscraper and two blocks of flats for Southwark site
7 days ago

Everton stadium job still on budget despite inflation

Club and Laing O'Rourke confident they can still build new ground for £500m
7 days ago

Construction output falls 1.4% halting 7-month growth spurt

Fresh output and orders figures confirm summer construction slowdown
7 days ago

Contractor services