Balfour Beatty loss for UK construction
By Richard Wright | 19th August 2021
Balfour Beatty, the construction firm behind Hinkley Point C in Somerset and HS2, saw another half year loss for its UK construction arm.
The firm that built the Stonehouse Incinerator in Gloucestershire says that Covid-related disruption has held back work in the UK where it has posted a loss of £23 million for the first six months of 2021, similar to the same period last year.
Profits across all sectors were £35m, contrasting with a £26m group loss in the same period of last year.
Revenue in the UK increased by 28% to £1,262 million (2020: £986 million) as a result of the growth in the order book in 2020 with higher volumes at HS2 and Hinkley Point C.
During the period, over 90% of UK Construction revenue was from public sector and regulated industry clients (2020: 80%).
Issues at private sector property projects in central London have been exacerbated by COVID-19 disruptions, leading to a lengthening of project schedules.
This situation has meant a reassessment of those contract end dates, triggering write-downs on a small number of contracts.
As a result, Balfour Beatty will no longer bid for fixed price residential property projects in central London.
US Construction recorded a £20 million underlying profit from operations in the period (2020: £6 million), above the pre-Covid level (2019: £19 million).
Leo Quinn, Balfour Beatty Group Chief Executive, said: "We continue to reshape Balfour Beatty to play to its strengths. These include leading capability in markets where governments are committed to long-term infrastructure programmes.
"It means choosing to exclude regions and sectors which cannot provide profitable, low risk growth, in favour of those that can. Our priority is on executing our already strong order book which will drive attractive cash generation and returns."
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