Skanska UK recovers as profit trebles to £44m

Aaron Morby 5 years ago
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Skanska’s UK business has got back on track after pre-tax profit jumped to £44m last year from £13.5m.

Kelly Gangotra, chief financial officer, sees opportunities ahead from data collection during construction
Kelly Gangotra, chief financial officer, sees opportunities ahead from data collection during construction

The improvement led by a focus on working with the right clients and stronger risk management saw operating margins restored from 0.7% in 2017 to 2.2%.

Revenue at the group edged up 7% to £1.9bn.

The turnaround follows a new strategy introduced in 2017 after the UK operations took heavy write-downs on problem contracts.

This saw Skanska set down the challenge to hit or beat tender margin on every contract.

As part of the shake-up, the group’s operating units reduced from nine to seven in a restructuring exercise.

Skanska UK’s two building operating units formerly separated on a geographical basis were brought together into one operation and facility services was combined with the M&E business into a single building services business unit.

Over the year the average number of staff remained stable at 5,700.

Kelly Gangotra, Skanska UK finance director, said: “Looking forward, we see increasing value in the vast amounts of data collected during design and construction.

“This data can improve our own efficiency, aid customers in managing assets once construction is complete and open doors to the development of brand new value adding services and products for customers in the built environment.”

The UK arm is now the star performer in Skanska’s European division, which suffered a loss for the second year running in 2018.

This stemmed from further project write-downs in Poland and an ongoing cost-cutting programme.

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