黑洞社区

Winners of the year

While the negatives of this year have all but dominated the headlines, there were plenty of good news stories.

The Construction Leadership Council (CLC) came into its own this year, spearheading the industry鈥檚 strategy to handle the coronavirus crisis. The council unveiled its Roadmap to Recovery, a two-year plan to not only help the sector recover but thrive post-covid.

Andy Mitchell, CLC co-chair, was named as 黑洞社区鈥檚 Personality of the Year for his role in steering the council and the sector, not only throughout the coronavirus pandemic but also amid the impending uncertainty of the UK鈥檚 exit from the EU.

In terms of individual firms, housebuilders led the recovery post the UK鈥檚 first lockdown. In November, Vistry reinstated its dividend and said that profit for the year would come in at the top end of expectations. The firm was not alone, with Taylor Wimpey and Crest Nicholson both reporting profit upgrades, and Persimmon publishing a bullish trading update.

Construction firms also wanted to do their bit for the public purse as part of the covid-19 recovery 鈥� particularly as they were in better financial positions than they had expected to be, given the crisis. Foster + Partners, Marshalls and Morgan Sindall were among those to either not take or pay back the money they were given for using the coronavirus job retentions scheme.

Other winners include the team behind Bishopsgate Goodsyard, which was finally given planning approval by London mayor Sadiq Khan last week 鈥� six years after the project first went in for planning, while EDF submitted plans to build Sizewell C nuclear power station on the Suffolk coast. 

Losers of the year

It鈥檚 difficult to know where to start with losers. Covid-19 meant all of us could be lumped into that category. Kier certainly was one firm left to rue the virus. Chief executive Andrew Davies was forced to admit that the sale of its housing arm, Kier Living, had been held up by the crisis. A disposal planned to be completed this year has now been delayed into next.

And the mood of Kier鈥檚 investors, already dealing with annual pre-tax losses staying above 拢200m for the second year in a row, will not have been lifted by the news that average month-end net debt went up from 拢422m to 拢436m, the rise largely down to falling revenue caused by the covid-19 outbreak.

One firm that might claim to be both a winner and a loser was Costain. It completed a 拢100m share issue in the spring which saw a Dubai contractor, ASGC, become its biggest shareholder with a 15% stake.

But in the autumn the firm found itself on the wrong end of an arbitration decision on a problem road job in south Wales. A long-running dispute with the Welsh government over problems affecting the construction of the A465 Heads of the Valley road was finally resolved 鈥� with the contractor set to lose 拢45m as a result.

This and another problem job for National Grid in Cambridgeshire helped send it to a 拢90m-plus pre-tax loss when its half-year results were announced.

If red ink was the sole judge of a firm鈥檚 mood, then Galliford Try could also be reasonably expected to join Kier and Costain in wishing 2020 good riddance. It slumped to an annual pre-tax loss of 拢60m, but the firm managed to get the sale of its housing and partnerships arm away to Bovis Homes 鈥� now called Vistry 鈥� right at the start of the year, before the pandemic spooked deals. It is now cash-rich and talking about returning to an interim profit. Timing, as the phrase goes, is everything.