Vinci UK holds margin at 2% through pandemic

Aaron Morby 2 years ago
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Vinci UK’s construction operations rose to the challenges of the pandemic last year managing to maintain group operating margin at around 2%.

Vinci is ramping up its use of digital technology across the building division
Vinci is ramping up its use of digital technology across the building division

Across the group, pre-tax profit remained stable at £16.9m (£17.7m) on revenue down by just 5% to £858m.

Giles Godard, chief executive of Vinci UK, said: “While the pandemic has impacted our clients in the retail, accommodation and catering industries very hard, we have also been in a position to help our clients in the health sector and in particular help the NHS fight the virus.”

The resilient performance saw Vinci maintain its available cash above £250m.

Godard added: “Bidding opportunities are strong and as a result of the formal awards of the HS2 N1 and N2 contracts main civils works our order book exceeds £2bn.”

Across the business, the Building division maintained stable profit despite a dip in revenue from delayed projects and contracts, while Taylor Woodrow managed to improve on its 2019 performance, raising margins to 1.7%.

Vinci trading by division
Pre-tax profit Revenue Margin
Building £8.8m (£8.8m) £381m (£429m) 2.3% (2%)
Taylor Woodrow £2.9m (£1.7m) £172m (£164m) 1.7% (1%)
Vinci Facilities £6.1m (£8.6m) £302m (£303m) 2% (2.8%)

 

At the end of the year, Vinci’s building arm had secured 82% of this year’s target turnover gaining preferred bidder status on over £750m of projects.

Workload is on track to return to 2019 levels, with the majority of its jobs secured in the north west and London and south regions.

The Taylor Woodrow civil engineering business also boasts a healthy forward order book with a forecast of £241m and £313m of revenue booked in for this year and 2022 respectively.

Godard said pipeline opportunities remained strong as far out as 2026 and were assessed at more than £1bn per annum.

HS2 is now Taylor Woodrow’s biggest client and for the next five years should account for 50% of civils work by value.

The procurement team is planning to submit bids for further HS2 work including a new depot at Washwood Heath, the people mover at Birmingham Interchange and the Phase 2a extension from Birmingham to Crewe where procurement is expected to start next year.

The business also plans to bid for Gatwick Airport main runway resurfacing and the redevelopment of Manston airport for commercial freight.

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