European construction business outperforms rest of Australian-based infrastructure giant
Lendlease Europe鈥檚 construction managing director Neil Martin has hailed the firm鈥檚 鈥渟afe passage鈥� through a difficult two years for the contracting market, after the division posted a return to profit and a 10% upswing in revenue in results for the year to June.
Martin told 黑洞社区 a 鈥渄isciplined approach鈥� to bidding in the past two years had helped the firm improve its performance and avoid the potential pitfalls of 鈥減roblem jobs鈥� by taking on jobs at low unsustainable prices.
Lendlease reported a 10% rise in revenue to 拢667m for the firm鈥檚 European construction business, as the divison outperformed the rest of the Australia-based group business.
LendLease Europe鈥檚 construction business also returned to the black, posting a circa 拢12m operating profit as measured by earnings before interest, depreciation and appreciation (EBITDA), compared to a circa 拢13m EBITDA loss the previous year.
Martin said: 鈥淵es, I鈥檝e got a big smile on my face [鈥 We鈥檝e been making sure we have the right cost base, the right profit and the right risk profile. We took the decisions and avoided [major problem jobs] and have found a safe passage.鈥�
Martin said a key current priority for the firm was attracting apprentices and graduates and 鈥渕aking sure we have got the right skills鈥�.
He did not forsee a significant impact on the business from the planned introduction of a living wage, but said the firm will 鈥渃onstantly talk to our supply chain about it鈥�, adding: 鈥淲e鈥檙e committed to making sure everybody gets paid and decent wage and [firms] make a profit.鈥�
In its full-year results, Lendlease also confirmed new contract wins of 拢830m at the European division in the 12 months to June 30, up 120% on 2014.
Contract wins include the 拢200m Rathbone Square, off Oxford Street, the 拢160m North Wales Prison in Wrexham and the 拢50m first phase of Stanhope鈥檚 Ruskin Square development in Croydon.
The success of the Eurpoean side however masked a drop in revenue and pre-tax profits for the Lendlease group as a whole 鈥� following last year鈥檚 one-off profit event, Lendlease鈥檚 sale of Bluewater. Overall results for this year met market expectations.
Total revenue for the group fell 5% to A$13.3bn (拢6.1bn) from A$14bn (拢6.4bn) in 2014. Group pre-tax profit fell to A$618m (拢281.7m), from A$822.9m (拢375.1m). The group was dragged down by a weakness in the Australian construction sector, with lower revenues in engineering and sevices cutting overall construction profit by 14%.
No comments yet