黑洞社区

Balfour Beatty鈥檚 construction arm racked up a 拢280m operating loss last year, as problem jobs continued to drag down the firm.

The major loss in the construction division compared to a 拢391m operating loss in 2014. Overall the firm posted a 拢199m pre-tax loss, reduced from a 拢304m pre-tax loss the previous year.

Speaking to 黑洞社区, Balfour Beatty chief executive Leo Quinn refused to rule out a further loss this year, and said the firm might not return to making 鈥渋ndustry standard鈥� margins until 2018, which he said meant 2-3% margins in construction.

Balfour cleared 60% of its problem jobs in 2015 and expects to have completed 90% by the end of this year. But as a result, Quinn said the firm鈥檚 2016 results would 鈥渟till be impacted鈥� by losses on problem jobs.

Asked if Balfour Beatty would return to profit this year, he said: 鈥淚 wouldn鈥檛 like to forecast - the industry is full of surprises, including positive surprises.鈥�

Balfour made 拢76m of writedowns in 2015, including 拢23m on restructuring costs from redundancies and office closures under its Build to Last transformation programme.

Despite the continued losses, Balfour expects to reinstate a divided for shareholders when it announces half-year results for the first half of 2016 in August.

Quinn said that while trading losses had continued, the firm now had 鈥渙ne of the sector鈥檚 strongest balance sheets鈥�, after smashing its target of bringing 拢200m of cash into the business by 2017, improving its cash position by 拢357m last year alone. The firm鈥檚 net cash position now stands at 拢163m.

Stripping out exceptional costs, the firm returned to a 拢14m operating profit in the second half of the year.

Overall revenue dropped 4% to 拢7bn, down from 拢7.2bn. Construction services revenue 鈥� which covers the UK and US 鈥� fell to 拢5.2bn, down from 拢5.4bn.

The firm鈥檚 support services and infrastructure investment divisions returned an operating profit, of 拢11m and 拢112m respectively, while corporate activities posted a 拢35m operating loss.

Balfour鈥檚 order book dipped to 拢11bn in 2015, down from 拢11.4bn, reflecting a more selective bidding approach.