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PFI lifts Bovis as Lend Lease writes off £393m

FINANCE Bovis Lend Lease profits hit £55m n Parent quits real estate in north America

BOVIS Lend Lease racked up £5.7 million in bid costs on the firm's successful challenge for the £4 billion Allenby Private Finance Initiative deal for the Ministry of Defence.

The job was won in tandem with Amey but Bovis's share of the costs were paid for by the integrated development division at the firm's parent group Lend Lease.

As a result, profits after tax at Bovis Lend Lease rose £9.7 million to £55.3 million in the year to June 2003.

Bovis estimates it has a 40 per cent share of the £2.5 billion London commercial construction market, which is in decline, but John Spanswick, Lend Lease chief executive officer for Europe, the Middle East and Africa, which includes Bovis, insists this is not a problem.

He said: 'Bovis Lend Lease continues to secure repeat business form key clients including BP, Stanhope, Land Securities and the National Health Service.

'The macro economic environment remains uncertain but our committed workload, forward order books and fund performance remain strong.'

By the end of June, Bovis had won work that is expected to produce a gross profit of £233 million.

The business also has a number of PFI healthcare deals that should, on reaching financial close, provide another £60.7 million in gross profits and it will continue to target this form of work in the defence sector.

Bovis parent company Lend Lease Corporation was forced to write off £393 million on operations in Asia, Europe and the US after quitting the real estate investment market in north America.

Lend Lease chief executive office Greg Clarke said: 'The decision to exit this business in an orderly way has certainly been expensive and painful but it has been the right thing to do.'

Including the write-downs, Lend Lease made a loss after tax of £294.4 million in the last 12 months.