Vinci UK suffered a colossal £217m pre-tax loss for 2014 as a result of problem contracts in its building and civils divisions.
In its results for the year ended 31 December 2014, the contractor revealed that “a number of projects…. encountered issues” in its building division.
In addition, its civils division suffered “major” problems on its £570m Nottingham Tram contract, leading to substantial losses for the year, the company said.
The contractor’s civil engineering arm Taylor Woodrow is delivering phase two of the tram project to Chilwell and Clifton, in a joint venture with Alstom.
In accounts filed with Companies House, Vinci UK said it would engage in “complex discussions” with Nottingham City Council and Alstom to reach financial settlement on the contract.
The handover of the tram is expected in summer this year.
Revenue for the business for 2014 stood at £1.02bn, down 18.4 per cent compared with the £1.25bn posted the year before.
Vinci’s UK business is split into six divisions: building; facilities; civil engineering (Taylor Woodrow); technology centre UK; Taylor Woodrow International; and investments, such as PFI and PPP bids.
- Building £49.9m loss
- Civil engineering £165.1m loss
- Facilities £218,000
- PFI £758,000 loss
- Other £1.3m loss
- Total £216.9m loss
Vinci said its building division would continue to pursue work in its traditional education and health sectors, while civils would focus on its three core areas of rail, road and energy.
It said the roads market had been in decline but was now emerging as a key sector, with an anticipated three-fold increase in project spending on the English strategic road network over the next five years.
In February, Vinci’s global construction business posted a 44.1 per cent drop in operating profits for 2014 from £505.8m (€680m) in 2013 to £282.7m (€380m).
The division saw a 2.8 per cent like-for-like fall in 2014 revenue to £11.4bn (€15.4bn).
Group revenue also dropped to £28.8bn (€38.7bn) from £30bn (€40.3bn).
The company forecast that overall French contracting revenue would drop by between 5 and 10 per cent this year.
Vinci chief executive Xavier Huillard told analysts at the time: “The world is unstable and France is really not in great shape – we pretty much all agree on that.
“Volatility is extreme, as we saw recently of oil prices.”
But he said major difficulties were now behind the group in the UK, with “a recovery plan” under way to address its UK construction activities.