Contractor boss hails 鈥榯urnaround鈥� at firm that was 鈥榟aemorrhaging cash鈥� two years ago

Balfour Beatty boss Leo Quinn has admitted the company鈥檚 survival 鈥渃ould have gone either way鈥� in his first few months as chief executive.

Speaking to analysts , Quinn said that when he joined the business at the start of 2015 鈥渟urvival was not mandatory鈥� as 鈥渨e were haemorrhaging cash鈥�.

Balfour Beatty this morning posted 拢8m pre-tax profit for 2016 after two years of deep losses, when it lost 拢199m and 拢304m in 2015 and 2014 respectively.

The firm also confirmed it had hit its interim 鈥楤uild to Last鈥� turnaround targets to generate 拢439m of additional net cash and strip 拢123m of cost out of the business in two years.

Quinn hailed a 鈥渄ramatic turnaround鈥� in UK construction, which edged back into the black with 拢2m operating profit for the second half of last year, although it still made a 拢64m operating loss for the year - 90% of the divison鈥檚 problem legacy jobs have now practically completed, with 70% financially complete.

Quinn stressed the UK business had 鈥渂ecome much more selective in the last 18 months鈥� when bidding and he was 鈥渧ery comfortable鈥� with the regional division shrinking further - it is now working on just 250 jobs, down from 400 at the end of 2015.

Quinn said that Balfour - which earlier this year sold its Middle East joint venture business and in recent months has exited markets like Indonesia and Chile - would consider further disposals, although it has no current plans to sell its stake in Far East JV Gammon Construction.

He said: 鈥淲e will simplify the business as far as we can鈥� We are not stopping there, we鈥檒l be taking more actions in the future.鈥�

Balfour reiterated its target to hit 鈥渋ndustry-standard margins鈥� by the end of next year - which it said meant 2-3% in UK construction, 1-2% in US construction and 3-5% in support services.

Quinn said: 鈥淸We鈥檒l take margins] one step at a time, we don鈥檛 want to get flashy about this.鈥�

Quinn said he believed Balfour had better results to come: 鈥淲e are only just starting to build momentum鈥� We now have thousands [of our staff] pointing in the right direction鈥�

鈥淚t鈥檚 not a quick fix - it鈥檚 a step-by-step transformation to build a company back to greatness.鈥�

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