Construction group Balfour Beatty, one of Britain’s largest construction groups, has reported a surge in profits.
Previous reports suggested that the group was close to collapse in 2015 largely due to the underbidding on contracts during the recession and accepting tight margins to procure work. The work then proved problematic and costs to resolve issues spiraled out of control.
Facing a similar potential fate to that of Carillion, turnaround expert Leo Quinn joined the group in 2015 as its Chief Executive with a mandate to get the business back into shape. He instigated a review called “Build to Last” to streamline processes and stopped bidding on risky contracts however he warned that the industry could not look forward to again seeing the high margins it once had.
The annual results showed Balfour’s construction operations delivered a margin of 0.8pc in the UK, compared with an industry standard of 2pc to 3pc.
“These results demonstrate that Build to Last is transforming Balfour Beatty,” Mr Quinn said. He added the business was now delivering “sustainable profits” and “industry standard margins” were in sight, with Balfour positioned to capitalise in the growing number if large infrastructure projects both in the UK and globally.
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