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Bovis shows strength in public sector work

FINANCE Increase in public portfolio lifts profits 22 per cent despite economic gloom

AN UPSWING in public work helped Bovis Lend Lease increase profits by 22 per cent in the second half of last year.

Half of the £1.4 billion-worth of jobs won in the six months to December 2002 came from the public sector, up from just 20 per cent in 2001.

John Spanswick, chief executive officer of Lend Lease in Europe, the Middle East and Africa, said: 'Against a backdrop of ongoing economic uncertainty, we are pleased that our workload, forward order books and fund performance have been strengthened.'

In the second half of 2002, Bovis Lend Lease pushed pre-tax operating profits up £6.3 million to £35.4 million but turnover slid £131.7 million to £1.7 billion.

Private Finance Initiative concessions will generate £1 billion in construction revenue and £179 million-worth of facilities management turnover in the next 10 years.

Bovis Lend Lease is part of Australian parent group Lend Lease's Real Estate Solutions division, which declared £9.4 million of PFI bid costs in the second half of 2002, including £4.5 million for a deal at Havering Hospital in east London.

The improvement in Bovis Lend Lease's profitability came as its parent lost £136.8 million after a £194.8 million write-down on its worldwide property portfolio.

Bovis Lend Lease's operating profits after tax ticked up £3.9 million to £22.1 million, with 70 per cent of profits and turnover coming from the UK. Turnover at the parent group slid £345.8 million to £2 billion in the second half of 2002.

A restructuring, including the departure of chief executive David Higgins to UK regeneration quango English Partnerships, will cost £15.6 million, which will come out of the profits for the six months to June 2003.

steve. menary@construct. emap. com