Project delays see Skanska UK margins slip to 2.7%

Aaron Morby 8 years ago
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Tougher market conditions saw Skanska UK’s construction and development business deliver flat operating profit of £38.4m on turnover up 12% to £1.43bn in 2015.

Skanska UK boss Mike Putnam says operation is performing well in tough and extremely competitive environment
Skanska UK boss Mike Putnam says operation is performing well in tough and extremely competitive environment

This saw operating margins at the combined business slide from 3% to 2.7% as delays in certain projects and tougher market conditions took their toll.

Mike Putnam, Skanska UK’s president and CEO, said: “In a tough and extremely competitive environment, I am pleased to report a year of steady performance across the business.

“A ‘book-to-build’ ratio of 104% signifies a strong pipeline of work and provides a firm foundation for our business in 2016 and beyond. There are also good future opportunities, worth around £1.9bn, where we are working on an early involvement or two-stage basis.

“Sustainable growth is our goal and we will deliver that in line with our purpose to build for a better society,” he said.

During the year Skanska UK booked £1.49bn of orders, down from £1.68bn in 2014, which proved an exception year for the firm’s major project teams.

Skanska also began work on several significant projects, including: the £140m New Papworth Hospital in Cambridge; AMP6 projects for Thames Water, Welsh Water and Anglian Water, worth £454m over five years.

Skanska has also just become one of the first constructors to achieve company-wide Level 2 BIM Capability verification from BSI  – a requirement from April 2016 for new public sector contracts.

Before the end of the year Skanska  sold its investment in Barts and the Royal London for around £80m to the groups three pension funds – 60% by the UK, Sweden 20% and Norway 20%.

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