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French construction firm Vinci grows revenue but warns of flat 2013

French construction giant Vinci has warned of a flat year ahead after growing group revenue to £33.4 billion in 2012.

The forecast led to Vinci Group’s share price falling 2 per cent today.

The group, including its concessions and contracting businesses, reported a 4.5 per cent increase in revenue in the year to 31 December 2012, with operating income from ordinary activities (EBIT) of £3.2bn, up 0.3 per cent.

Vinci Construction, which oversees the UK business, saw revenue rise from £12.2bn to £13.2bn in 2012.  This includes £7.3bn in France, and £5.96bn outside France.

Operating income from ordinary activities in construction dropped slightly from £544m to £540m.

The construction order book is £15.8bn.

The group reported “firm growth in the UK, Chile, the USA and Canada”.

Vinci UK accounts in April 2012 said profits had fallen by half in the 2011 year, when the contractor said it planned to hire 400 workers in 2012 and “tighten” its sub contractor management structure.

Vinci signed off  PFI road maintenance contracts in Hounslow (£88 million, 24.5 years) and the Isle of Wight (£95 million, up to 24.5 years) in the UK.

The group said:  “Vinci turned in a robust performance in 2012, with further growth in revenue and net income despite a difficult economic climate, particularly in Europe.”

But it added: “The economic climate is expected to remain difficult in 2013, especially in Europe, and the the group is expecting business to be flat in 2013,

“Contracting has started the year with a very healthy order book in both France, with the high-speed rail line project between Tours and Bordeaux, and abroad.

“However, if trends observed at the end of 2012 continue, there could be a downturn in order intake, due to the group’s emphasis on margins rather than volume for project selection.”

Net financial debt was £10.8bn at 31 December 2012, slightly down relative to end-December 2011, and cost £551m in fiannce.

UK contracts

In the UK, Gatwick Airport awarded Vinci a £183.9m deal to transform Pier 1 in the South Terminal in November.

Its Vinci Ringway jv also saw financial closes on the £800m Isle of Wight highways PFI and £800m Hounslow highways PFI.

Vinci Group

The group also includes the concessions businesses, Autoroutes and Concessions. In contracting, it includes Energies, Eurovia and Immobilier.

The EBIT margin was 4.1 per cent, compared with 4.5 per cent in 2011, on the back of provisions made within Vinci Construction Grands Projets after an “unfavourable court decision in the USA”.

In contracting, the EBIT margin was 4.2 per cent, against 4.6 per cent in 2011, put down to non-recurring items at Eurovia and VINCI Construction.

France brought in £20.7bn of revenue, with all other European countries bringing in £8bn, which flat on last year.

Vinci landed a £3bn deal in December with the Portuguese government to acquire ANA, which controls all the country’s airports.

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