There was a fair amount to be positive about in Balfour Beatty’s half-year results today.
Analysts Liberum summed it up nicely by saying it was “better than feared”, after the contractor posted underlying profit before tax of £7m (compared with a Liberum estimated loss of £25.1m for the same period).
Everyone was expecting the group to take a hit in its UK construction services division – and they were right to expect this with Balfour Beatty posting a loss of £66m.
But this was a major improvement on last year’s HY where the group posted £145m for the same period. It would appear that they have things more under control.
Construction News spoke to chief executive Leo Quinn at 7.30am as soon as the results were published and he was eager to point out that this was no longer a company that was surrounded by chaos.
He had some solid stats to back up his point, with 81 per cent of the identified 89 UK problem projects now complete.
From that, the contractor has managed to close down 19 projects from FY 2015 to date (36 FY 2015: 17 at the half-year stage on 1 July).
Though he admitted to having some challenges around the “dark art” of closing down projects, overall he seemed confident that the company had a rosy future and said it was still targeting 2-3 per cent margins by 2018.
There were a few extra things worth noting.
Something that comes up repeatedly in the conversations I have with clients is the importance of having an ’A team’ on their schemes – something that Mr Quinn clearly gets.
He told CN that the group’s Olympic Park team would be moving over to work on the £500m One Nine Elms job, on which it replaced Interserve in July.
He said this was also a deciding factor in Balfour Beatty being chosen for the $697m (£524m) contract to electrify an 84 km high-speed rail line in California.
Mr Quinn had a few things to say on the increase in H&S penalties, which came into force in February. You can see the full write up of that here.
Construction News was interested to hear where Mr Quinn stood on offsite manufacturing.
Sources had told CN that he was lukewarm on the idea but he dismissed this as “rubbish”.
Although, he did add that the industry has yet to get the logistics and distribution right – so perhaps he hasn’t been entirely convinced yet.
In other news…
Constructing Excellence has merged with research organisation BRE, with an aim to grow its membership by 10 per cent in the first year.
Project Report: Listed Scottish farm becomes Italian-style campus. Read all about it here.
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