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Skanska UK profits soar after PFI close

FINANCE - London commercial sector and closure on Barts PFI boost contractor's income

PROFITS have surged at the UK contracting arm of Swedish giant Skanska after the business was reimbursed to the tune of £5 million for Private Finance Initiative bid and development costs.

Skanska finally closed the £1 billion Barts and the London hospital scheme in the first half of this year and the reimbursement and booming commercial work sent profits surging.

Skanska UK chief executive David Fison said: 'Operational income has been enhanced by the accounting for PFI bid costs. If you take that off - and it's about £5 million-plus - we're still clearly going in the right direction. The nice thing is that work is coming from all areas but the London commercial market has really picked up.

'We're able to work much earlier with clients now and we're turning commercial work away rather than draw up scratch teams by taking staff from other firms.'

Earlier this month, Skanska sold a £3.8 million stake in its Bridgend Prison concession, making a capital gain of £2.8 million, but more sales are unlikely.

Skanska UK's civil and specialist operations provided turnover of £145 million in the first half of this year, with the construction operation enjoying a workload of about £177 million and the PFI accounting for the rest.

Skanska's UK arm was the third biggest source of work in the first half of this year, behind the firm's native Swedish market and the US building sector.