Balfour Beatty announces construction loss
Balfour Beatty has announced losses in its construction services division during the opening part of 2013.
The company recorded a
£41 million decline in turnover during the first months of the year and officials have put this down to poor performance in the UK. The half-year results up to June
28th 2013 showed that the construction side of Balfour's operations had fallen on turnover of
£3,151 million from a
£59 million operating profit since the last announcement. However, the company's order book was up three per cent at £13.9 billion following positive results in the US.
A recent report by the Construction Products Association (CPA) highlighted that the UK's construction sector was set for a rebound. The industry has been going through some tough conditions recently and this has had an effect on Balfour. Officials stated that pre-tax profits had taken a hit of 70 per cent from
£150 million to
£45 million while revenue also dropped by three per cent to
Balfour said in a statement: "We commenced a comprehensive piece of work to evaluate the regional business in its entirety as a result of which we took the decision to close those regional delivery units with weak future prospects.
"With new leadership in place in the UK and barring unforeseen circumstances, the construction business is equipped and motivated to achieve a profit level in the second half similar to that achieved in the second half of 2012."
However, there could be light at the end of the tunnel as the CPA predicted that construction output will grow by 2.2 per cent in 2014. This would represent the industry returning to recovery and one of the main factors of this is the strong performance of the housing sector, Construction Enquirer reports.
Other areas such as rail construction, energy-related work such as offshore wind, nuclear and small renewables as well as infrastructure is also expected to add to a 4.5 per cent growth going into 2015.
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Date: 14/08/2013 16:18:00
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