Balfour Beatty has responded to recent setbacks in its financial performance with the launch of a transformation programme aimed at bringing each part of the business up to “industry-standard levels”.
The contractor’s Build to Last programme will focus on four areas, including the strengthening of financial control and the introduction of a more disciplined approach to project bidding and risk review processes.
This comes after a KPMG report into its UK operation criticised the firm’s bidding process, claiming it was often “at very low margins with optimistic assumptions around cost, programme and procurement savings, and inadequate provisions for risk”.
The report came at the same time as Balfour Beatty issued a £70m profit warning – it’s sixth in two-and-a-half years.
Commenting on the launch of the programme, chief executive Leo Quinn (pictured) said: “The group’s recent trading makes it imperative to gain early momentum in our transformation plans.
“While further challenges remain, there are clear opportunities to achieve improvements in cash generation and profitability in the near term.”
Other areas of focus are the retention of key employees and subcontractors by investing in training, and the prioritisation of safety.
Balfour Beatty has already begun implementing the programme in both the US and UK.
It has streamlined its property portfolio, rolled out a company-wide cash generation drive and set up a Build to Last office with US and UK workstreams.
Mr Quinn continued: “Balfour Beatty has great strengths across its portfolio – not least in its investments division, where recent transactions underline the ongoing ability of this business to create value.
“I continue to believe all our operations should achieve industry-standard performance against what appears to be a beneficial market environment.
“Longer term, we will shape a group with leadership in key markets, driving best-in-class performance from a platform of strong capability, leaner processes and robust execution.”
The firm will release further details of the programme when it announces its preliminary financial results next month.