Bouygues UK building and energy firms suffer losses

Aaron Morby 5 years ago
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The two main UK contracting businesses of French Construction giant Bouygues have both suffered losses in the face of project delays.

The Energy & Services Contracting business is the latest to fall foul of technical problems delivering energy from waste projects.

Problems with two biomass projects were first flagged up in parent Bouygues Group public accounts last year.

Now latest accounts for the UK business published at Companies House show the UK Energy & Services division slumped £50.5m into the red.

Both biomass power plants experienced difficulties during the testing and commissioning phases, related mainly to malfunctions on certain equipment, leading to delays, additional costs and compensation paid to customers.

One of the projects was a flagship gasification facility in Hoddesdon, Hertfordshire. The £60m advanced conversion treatment plant was expected to become operational in early 2017.

Turnover at the business, which employs just over 250 staff, rose 16% to £120m.

At the same time Bouygues UK, the mainstream building contractor, also returned to the red again after generating its first profit for several years in 2017.

A combination of more selective bidding and delayed project starts saw revenue slump nearly 25% to £452m.

This impacted the business, which kept average headcount at around 1,300, sending it to a £1.6m loss after the breakthrough into the black in 2017 following a restructuring of its regional contracting businesses: Thomas Vale, Leadbitter and Denne.

Fabienne Viala, chair of Bouygues UK and Bouygues Energies & Services, said the group had incurred further losses on the power stations since 2018 year-end, with 2019 performance dependent on the outcome of finalising all matters concerning the biomass plant contracts.

“Despite these difficulties, the company continued to deliver successful projects in its core markets, particularly in respects of the design and build of data centres,” she added.

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