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Aecom UK profit halves after problem job hit

Aecom UK’s profit fell 52 per cent in 2017 after the company suffered losses on a problem job.

Pre-tax profit for the company halved to £3.3m for the year to 29 September 2017, compared with £6.9m in the previous 12 months.

Aecom said the reduction was largely down to a “underperforming project” in one of the company’s “key markets”.

The company also said overall growth in the construction sector had been hampered by ongoing uncertainty around Brexit and the collapse of Carillion.

Aecom UK chief executive David Barwell (pictured) said: “Aecom’s business in the UK has a robust strategy in place to minimise downside risk and capitalise on growth opportunities.”

Accounts for 2017 showed the firm’s turnover increased to £403.1m from £354.2m the year before, with the boost primarily attributed to new work in the UK water sector.

Turnover from UK-based work increased from £328.8m to £384.5m, accounting for virtually all of Aecom UK’s revenue growth.

The UK office’s work in the Middle East dropped for the year, turnover falling from £13.3m to £5.5m.

Aecom said it remained committed to being the “premier, fully integrated infrastructure firm in the world”, with the ability to design, build, finance and operate assets.

The company moved into the UK contracting market in late 2015, targeting commercial and residential work.

In April this year its contracting arm struck a deal to deliver 3,000 modular homes as part of the £3.5bn regeneration of Silvertown Quays in east London.

In 2017 it secured a landmark contracting job to deliver the £800m Spire tower in Canary Wharf, which will be the tallest residential development in Western Europe when complete, according to the client.

Aecom UK underwent a management shake-up last November, with former Middle East manager Mr Barwell taking over as chief executive for the UK business.

The UK business saw its pension deficit fall to £60.7m as of September 2017, down from £110.8m a year earlier.

An actuarial reassessment in 2017, which reduced the company’s assumed liabilities for the future while increasing the value of its pension fund assets, led to a gain of £43.6m.

The firm said it will pay a total of just over £10m into its five defined benefit pension schemes in the current business year.

Across its global operations Aecom reported a $429m (£325m) pre-tax profit on revenue of $18.2bn (£13.8bn) for the year to 30 September 2017.

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