Balfour Beatty suffers £199m loss

Aaron Morby 6 years ago
Share

Balfour Beatty suffered a £199m pre-tax loss last year as UK legacy contracts continued to blow a hole in overall group performance.

Chief executive Leo Quinn says Balfour is well on track at the halfway point of his two-year recovery programme
Chief executive Leo Quinn says Balfour is well on track at the halfway point of his two-year recovery programme

Despite extra exceptional losses, which were up £49m from those revealed at the half-year, chief executive Leo Quinn said Balfour Beatty was well on track with its two-year transformation programme at the half-way stage.

In the second half of 2015 Balfour managed to deliver a £14m operating profit for the first time in several years.

During the year Quinn said Balfour Beatty had focused on cost savings, cutting 846 backroom staff, which helped to deliver annualised savings of £60m from the 2016 target of £100m.

Overall group turnover slipped 4% to £8.4bn, while net cash dropped from £260m to £163m.

Improved controls on bidding combined with the decision to withdraw from certain types of work in London and the Middle East, saw the group order book slide 4% in 2015 to £11bn, with UK construction forward orders down 17%.

The total loss from the UK construction business including provisions on several historic contracts that suffered schedule slippages and operational deterioration as well as non-underlying Engineering Services contracts was £195m (2014: £317m).

Balfour Beatty trading divisions
Profit 2015* Profit 2014* Turnover Turnover
Construction Services
UK £187m loss £229m loss £2bn £2.35bn
US £22m loss £29m £3.1bn £3bn
Rail £5m loss £6m loss £274m £368m
Mid East £34m loss £15m loss £197m £197m
Far East £19m £12m £796m £686m
Total £280m loss £391m loss £6.6bn £6.95bn
Support services £24m £50m £1.26bn £1.27bn

*continuing operations

He said the business was making good progress working through legacy contracts, with 60% now complete, up from 31% or 89 projects at the half-year.

Quinn told the Enquirer: “By the end of 2016, the number of these projects at practical or financial completion is still expected to be greater than 90%.

“In its first year, Build to Last has achieved significant progress in transforming Balfour Beatty,” he said.

 “Our main markets are providing a positive backdrop, so that with stronger governance we can both win and deliver business on the right terms. Looking to the future, we are investing to maintain Balfour Beatty’s expertise and assets.

“By the end of 2016 we will achieve our Phase One targets: our costs are coming down, our cash flow has improved substantially and we expect to reinstate our dividend later this year.

“Over the following 24 months, I am confident we can reach industry-standard margins. But above all, Build to Last is putting in place the foundations to build a Balfour Beatty with market leading strengths and performance over the longer term.”

 

Latest news

Pagabo names £1.6bn civils framework winners

Forty eight firms secure spots on new civils and infrastructure framework
2 days ago

£1.25bn Stonehenge tunnel job winner revealed

Spanish, Italian, and Austrian JV scoops A303 Amesbury to Berwick Down scheme
3 days ago

Altrad swoops for Doosan Babcock

Over 4,000 staff will transfer to the fast-expanding industrial services group
2 days ago

Suspended jail sentences after fatal roof fall

Court sentences two men after hearing of safety failures on over-cladding job
2 days ago

McAleer & Rushe on track for record £425m revenue

Revenue and profit return to pre-pandemic level as focus grows on high-rise flats
3 days ago

Domis on the hunt for subcontractors and suppliers across Cornwall

Contractor hosting meet the buyer event to set-up local supply chain for string of major projects
3 days ago

Lendlease £140m hospital claim to hit High Court

Cramlington hospital trust claims for new temporary building while remediation works carried out
3 days ago

Balfour bags £50m Piccadilly Line upgrade

First award under latest London Underground High Voltage Power framework
3 days ago

Cash runs out on HS2 old Curzon Street station refurb

Laing O'Rourke/Murphy JV halts work on historic station renovation
3 days ago

MPs call for cut in building demolitions to save carbon

Watchdog MPs set out urgent plan to prioritise retrofit and reuse of buildings over new build
3 days ago

Structure Tone stems losses as order book grows

Fit out specialist racks-up £4m loss but is confident of turnaround this year after restructuring
3 days ago

Construction leaders launch inflation busting taskforce

All sides of industry urged to work together rather than row over price hikes
4 days ago

HG Construction names next chief executive

Adam Quinn, son of one of the MBO founders, to take the reins in July
3 days ago

Lendlease Stratford IQL blue towers approved

35- and 14-storey hexagonal blocks will provide 350 flats
3 days ago

Track worker killed by train was controller of site safety

Distracted rail worker "lost awareness of his position relative to the line the train approached on"
4 days ago

MechFS went down owing £9.5m to supply chain

Subcontractors left holding millions in worthless invoices
4 days ago

HG Construction profit jumps 50% to £25m

Multi-storey homes and student accommodation jobs drive sales to record £243m
4 days ago

Go-ahead for Newcastle’s largest build to rent project

Work to start on 14-storey flats complex in the autumn
4 days ago

Contractors wanted for £288m Northumbrian Water frameworks

Ten lots up for grabs under latest major civils deal
4 days ago

Plans in for 142-room Exeter net zero hotel

RED Construction to build first of hotel developer's planned chain of net zero hotels
4 days ago

Rail workers vote to strike over maintenance job cuts fears

Network could grind to a halt next month
4 days ago

Race for £100m Immingham ferry terminal job

AB Ports aims to start work in mid 2023
5 days ago

Sisk wins Stockport £60m Weir Mill restoration

Work to start next month on 250 flats scheme
5 days ago

Developer swoops for 1,000-flats landmark Leeds site

Revised plans to be submitted by the end of the year for start soon after
6 days ago

Dominvs seals £173m funding for 713-bed student job

HG Construction to start major Hammersmith student complex in November
6 days ago

Briefings start for £1bn Midland Mainline Electrification plan

Market engagement starts for next seven sections covering 139km route to Sheffield
5 days ago

Forterra pushes back £27m factory refurb plan

Supply chain shortages hit project as brick prices rose another 12% last month
5 days ago

Speedy Hire results slowed down by KPMG

Hire giant left "frustrated and disappointed" by delay request from auditor
5 days ago

London office starts set to surge over next 6 months

Deloitte Crane Survey predicts jump in starts in Capital despite high building costs
6 days ago

Fit-out firm BW Workplace slips into the red

£5.2m backdated R&D tax credit deal lifts after tax performance
6 days ago

Contractor services