Construction giant Balfour Beatty’s 2015 annual results show a loss of £199m. This brings to £774m the amount lost by the construction services division over the last three years.
The Construction Index reports that according to chief executive Leo Quinn, the business is now pointing in the right direction, and shareholders can expect to see dividends resume later in the year.
Group pre-tax loss for 2015 was £199m. The equivalent figure in 2014 was £59m loss, but only thanks to £234m banked from the sale of Parsons Brinckerhoff. Revenue in 2015 was down 4% at £8,444m (2014: £8,793m).
Quinn commented “We have upgraded the leadership team and set out a clear direction. We are implementing consistent processes to integrate our businesses into a group with greater transparency and control. Our main markets are providing a positive backdrop, so that with stronger governance we can both win and deliver business on the right terms. Looking to the future, we are investing to maintain Balfour Beatty’s expertise and assets.
“By the end of 2016 we will achieve our Phase One targets: our costs are coming down, our cash flow has improved substantially and we expect to reinstate our dividend later this year.”
LeoQuinn further commented that the business was “continuing to manage the historic problem contracts through to completion”. In mid 2015, 89 historic contracts were identified that were causing problems. By the end of the year, 60% of these projects had reached practical or financial completion, up from 31% as at June 2015. By the end of 2016, the number of these projects at practical or financial completion is expected to be more than 90%.
The support services division continues to be profitable for Balfour Beatty. In 2015 it made a £24m operating profit on £1,259m revenue. However, these numbers were down on 2014 when it made £50m from £1,273m revenue.