Balfour boosts profits despite another Aberdeen road hit

Grant Prior 7 years ago
Share

The troubled Aberdeen Western Peripheral Route project lost Balfour Beatty another £23m during the first half of this year.

Group chief executive Leo Quinn said "there is a lot to feel good about"
Group chief executive Leo Quinn said "there is a lot to feel good about"

The contractor confirmed in its half-year results today that the cash outflow on the scheme in 2018 is now forecast to hit £135m.

Balfour became a 50% partner in the scheme with Galliford Try in January when previous joint venture member Carillion went bust.

Problems on the AWPR dented returns at the UK Construction Services division where operating profit for the six months to June 29 was £5m compared to £2m last time.

Excluding the AWPR project the division saw margins rise to 2.1% as Balfour’s Build to Last transformation programme continued to deliver results as the firm maintained its tighter controls over bidding.

Regional construction has reduced the number of live sites to 250 from 400 three years ago.

Balfour said: “During Build to Last, there has also been a shift towards a lower risk contract portfolio, with a reduction in the number of fixed price contracts offset by an increase in target cost (negotiated tender) contracts and framework agreements.”

Group chief executive Leo Quinn said there was a “lot to feel good about” in the results with Balfour hitting its target of returning to industry standard margins across all divisions.

Group pre-tax profits were up to £56m from £22m on turnover down to £3.84bn from £4.19bn.

Average net cash increased during the period to £161m from £45m.

Quinn said that the longer-term target for UK Construction was a margin of 5%.

He said: “There is no doubt that with one less major competitor after Carillion’s failure people are getting more sensible about bidding levels.

“Contractors are getting more risk averse and prices are coming back albeit from a very low level.”

Latest news

Redundancies loom at M&E giant Dalkia

Consultation starts at Southern region
17 hours ago

Land deal unlocks East London £750m health hub plan

Queen Mary University secures site to build Whitechapel life sciences complex
17 hours ago

Aureos bags £45m Howden Relief Road job

Former Keltbray infrastructure business to start construction next month
17 hours ago

Four injured after partially built floor collapses

Court hears how steel beams were cut at the same time Acrow props removed
17 hours ago

Careys directors sacked after £4m job-loss showdown

Pair win unfair dismissal case after being accused of "tickling each other’s bollocks"
3 days ago

Octavius wins £31m A38 corridor upgrade

North Somerset picks firm for key trunk road improvement scheme
16 hours ago

Danny Sullivan Group hits back over HS2 allegations

Labour supply giant confident it is "fully compliant with all tax obligations"
4 days ago

Bid race takes off for £500m MAG airport small works deal

Nine-lot framework to cover civils, building and M&E jobs up to £5m
4 days ago

Mace director joins Wates as Chief Commercial Officer

Pat Fitzgerald to lead commercial strategy at Wates
4 days ago

Rob Perrins steps up as executive chair in Berkeley shake-up

Long-serving chief steps up to lead housebuilder’s next growth phase
4 days ago

Competition watchdog turns attention to civil engineering

Competition and Markets Authority launches study into road and rail delivery
4 days ago

Timber imports rise for first time in four years

Softwood volumes and prices lead rebound as housing outlook improves
4 days ago

10-Year Infrastructure Strategy published

Full details as Government pledges £725bn of funding over the next decade
4 days ago

Korean firm buys part built Hackney job from failed Elements Europe

Work can now restart on 21-storey hotel and office development
5 days ago

Mark Wild radical reset plan to rescue HS2

Senior manager bonuses scrapped and non-permanent labour cutback
5 days ago

HS2 supply chain fraud claims spark ministerial probe

Transport secretary pledges one-year reset for HS2 to end 'litany of failures'
5 days ago

Lords launch inquiry into Building Safety Regulator delays

Industry asked for evidence of how system is failing: Have your say
5 days ago

Willmott Dixon director becomes co-owner of local contractor BSN

Nick Gibb targets £100m turnover at Dudley based national contractor
5 days ago

Dry lining boss sentenced after mystery account moves

Court hears of £500,000 in unexplained transfers before contractor went under
5 days ago

Barhale bags £16m shaft tank for Severn Trent Water

"Final piece in the puzzle" of Etruria Vale upgrade
5 days ago

Keltbray strikes £30m funding deal for growth

Three-year funding deal to support push into higher-margin work
6 days ago

Take That brother buys steelwork giant William Hare

Entrepreneur Simon Orange seals deal for £350m turnover contractor
6 days ago

Civils contractor LF Solutions files administration notice

£20m-turnover specialist has labour supply arm and own plant fleet
6 days ago

Joseph Gallagher lands £50m green energy deal

Major trenchless construction contract for HyNet North West project
6 days ago

New boss drives NG Bailey to record revenue

Fresh strategy lifts M&E group's order book to £1.6bn
6 days ago

Costain wins vast underground hydrogen storage design job

Firms lands FEED contract for Cheshire salt caverns conversion
6 days ago

Graham gets green light for £70m Glasgow student tower

Construction due to start this year on 25-storey Anderston scheme
6 days ago

New £16bn National Housing Bank to drive 500k new builds

Homes England given new powers to finance stalled and complex schemes
6 days ago

Morgan Sindall upgrades profits forecast for this year

Overbury fitout and construction operations exceed trading expectations
7 days ago

Major project bidders to face ‘British jobs’ test

Contractors to face tougher jobs pledge scrutiny under new procurement shake-up
1 week ago