Balfour Beatty UK construction arm returns to profit

Grant Prior 7 years ago
Share

UK Construction is back in profit for Balfour Beatty as the company’s turnaround plans continue to pay dividends.

Full year results for 2017 show UK Construction made a £16m profit compared to a £65m loss last time.

The figures do not include a raft of non-underlying items which the Balfour board has decided to account for separately.

These include a £44m provision on the Aberdeen Western Peripheral route where Balfour had to step in following the collapse of Carillion.

Other items include £12m of restructuring costs and an £18m gain on the disposal of Heery International.

Problem contracts which caused Balfour’s financial problems are mainly worked through now with 93% of the legacy jobs complete at the end of 2017.

The company said: “The Group is continuing to manage problem contracts through to completion. Each requires a high level of leadership involvement to ensure the best achievable outcome and a positive effect on customer relations.

“In most cases, the positions taken are proving adequate, reflecting, as expected, a mix of projects successfully closed out ahead of expectation, as well as others where the outcome, although disappointing, is being managed to its best conclusion.

“A very limited number of contracts have disappointed outside of this expectation.

“The largest of these is Aberdeen Western Peripheral Route which has experienced ongoing schedule and cost issues.

“These contracts have impacted the underlying results of Construction Services.”

Group results show an overall underlying pre-tax profit of £165m, more than doubled from £62m previously on turnover steady at £8,234m from £8,215m.

Balfour said it is on track to return to margins of 2-3% in UK Construction by the end of this year compared to last year’s level of 0.8%.

Balfour’s balance sheet improved with net cash of £335m at the year end following improved performance and a series of sales of stakes in the M25 Connect Plus consortium.

Leo Quinn, Group Chief Executive, said: “These results clearly demonstrate that our Build to Last programme is transforming Balfour Beatty.

“The Group has been repositioned to drive sustainable growth in profits, underpinned by a strong balance sheet.

“It has the right culture and capabilities to capitalise on the rising tide of infrastructure spend in our chosen markets.

“As a result of Build to Last, and the governance and controls now in place, we remain on track to achieve industry-standard margins in the second half of 2018.

“In the medium term, we are building a Group capable of delivering market-leading performance.”

Latest news

Goldbeck to build new £50m Cardiff County Hall

German-owned contractor vowing to be a "disrupter in the UK market"
5 hours ago

Laing O’Rourke chairman to step down

Ray O'Rourke to take over chair from Sir John Parker
17 hours ago

Farrans lands Leeds Bradford Airport phase 2 upgrade

Contractor takes follow-on refurb job after terminal extension
12 hours ago

ISG built Bristol housing block to be torn down

Contractor's collapse sinks Bristol flats remediation claim
20 hours ago

RSK revenue nears £2bn as losses soar to £132m

Refinancing last summer puts group on course for more growth this year
20 hours ago

Bridge design wind error adds £20m to construction costs

Completion of £148m Grantham Southern Relief Road delayed by a year
20 hours ago

Rayner pledges extra £350m for social house building

More than 3,000 homes could be built with cash injection
19 hours ago

City’s biggest retrofit tower scheme approved

Triple-fronted 70 Gracechurch Street building will rise to 33 storeys
2 days ago

Defibrillator saves worker’s life on Wates site

Machine operator saved after "dying" for 16 minutes on prison job
2 days ago

Funding deal for £125m Camden Roundhouse scheme

Developer Regal set to start 264-bed student scheme
2 days ago

Balfour leadership rejig to focus on three key growth sectors

Divisional CEO trio take lead roles for energy, defence and transport expansion
2 days ago

ABP bidders day for £150m Humber ports pipeline

Nine projects in the pipeline to support automotive and energy transition schemes
2 days ago

Hinkley Point C to create 3,000 jobs as work ramps up

Fitout surge to swell workforce to 15,000 in next 18 months
2 days ago

Hercules sells suction excavator division for £2.4m

Loss making arm sold by labour hire specialist
2 days ago

Foundations complete at HS2 Old Oak Common station

Station base completed using 76,000 cubic metres of concrete and 17,000 tonnes of reinforced steel
2 days ago

Bids invited for £175m consultancy framework

Fusion21 inviting consultants to join latest four-year deal
2 days ago

Regulator pledges to clear 122 project backlog by April

A third of applications failed to meet required standards says building safety regulator
3 days ago

Government opens bidding for new AI Growth Zones

Interest for sites in Scotland, Wales, the North East and North West
3 days ago

Vistry strikes deal for phase 3 of £1.2bn London estate rebuild

323-homes at giant Clapham Park scheme move to construction
3 days ago

Fire hits £31m student accommodation site

Blaze breaks out on Lancaster job where Bridgestone Construction is main contractor
4 days ago

Green light for £250m Salford data centre

Six acre plot to be transformed at Peel Waters site
3 days ago

Two in race for £269m HS2 people mover deal

Winner expected next year as hunt continues for infrastructure builder
3 days ago

M&E specialist J S Wright files administration notice

Employee-owned Midlands specialist was established 135 years ago
6 days ago

£90m funding release for quartet of road upgrades

Government green lights schemes to improve journey times in Wiltshire, Leeds, Essex and Buckinghamshire.
6 days ago

Another month of repairs at McAlpine problem panel hotel

Road closure causes chaos as wind-hit cladding needs fixing above
6 days ago

Skanska lands design role on £1.25bn steelworks

Skanska team to work alongside main contractor McAlpine on Port Talbot project
7 days ago

Construction boss jailed for double Covid loan claim

Two-and-a-half years for building fraudster
6 days ago

Bleak January for construction buyers

Latest bellwether survey shows output down and costs up
7 days ago

Starmer rips up rules to ease building of nuclear reactors

Industry backs push for small modular reactors to be built where needed
7 days ago

McAlpine tops January work league with steelworks win

Port Talbot steelworks job dominates January orders haul
7 days ago

Contractor services