Some of the UK’s largest contractors have told Construction News they are working to improve their payment practices following the publication of new data yesterday.
Analysis by CN found the 20 largest contractors take 47 days on average to pay suppliers, while 38 per cent of invoices are not paid on time.
Interserve, which had by far the highest proportion of invoices paid later than agreed terms at 83 per cent, said it was working to improve its payment practices.
A spokesman said: “Following Interserve’s refinancing of the business in April 2018, we are committed to improving our performance on these measures and are currently working in partnership with our construction supply chain to ensure this improvement is realised, in both the short term and medium term.”
Costain reported the second-highest proportion of invoices paid later than terms at 67 per cent, as well as one of the highest average days to pay at 59.
A spokesman for the company said: “We acknowledge that we have more work to do to improve our payment practices and are committed to doing this as a signatory to the Prompt Payment Code.”
The UK’s largest contractor, Balfour Beatty, took an average of 54 days to pay and saw 54 per cent of invoices not being paid to terms – both higher than the average for the 20 largest contractors by turnover.
A spokeswoman said the firm was working to speed up payments through more automation of its systems.
Willmott Dixon, which emerged as the promptest payer of the top 20 at 33 days with just 8 per cent of invoices paid beyond terms, welcomed the transparency offered by the payment reports.
Chief executive Rick Willmott said: “Our industry’s ability to thrive in the future is directly linked with how we support our SMEs, and the publication of payment practices means stakeholders can now see which of us is taking a responsible approach to prompt supply chain payment.”
Skanska, whose days-to-pay and proportion of invoices paid later than terms were both lower than the top-20 average, said payment transparency was important.
“We strongly believe that fair and transparent payment is essential to our supply chain partner relationships and the delivery of successful projects,” its spokesman said.
Engie Regeneration was revealed as taking the longest to pay among the 20 largest contractors, at an average of 61 days.
A spokeswoman for the company said its standard payment terms were 60 days, and that its slow payment relative to the top 20 was offset by its record on paying to terms.
“While this may be longer than the average top-20 contractors’ terms, the surety of when we pay is the best in the industry, with 99 per cent of our invoices paid within agreed timescales,” she said.
Mears also pointed to its low proportion of invoices not paid on time – 15 per cent – as justification for having a higher-than-average time to pay of 59 days.
“The report shows that Mears is in fact considerably better than others in the sector at meeting the commitments it has made with its suppliers and we continue to look at all ways to improve this further,” a spokesman for the company said.
Galliford Try’s time to pay was 47 days on average, but it was better-than-average at paying to terms, with only 26 per cent of invoices being settled later than terms.
A spokesman for the company said it was working to give suppliers “greater transparency” over payment processes and was reviewing its policies with “a view to shortening supplier payment times”.
The other top-20 contractors bar Laing O’Rourke, which is not due to report until October, have been contacted for comment.
Morgan Sindall, which paid faster than average at 44 days with only 24 per cent of invoices paid later than terms, declined to comment.