Balfour Beatty’s turnaround plan has defied construction woes of other firms and delivered extremely positive results for 2018.
It’s chief executive Leo Quinn has highlighted resolving legacy issues of forced growth and investments in capability and leadership which has seen underlying pre-tax profit rise 10% to £181m last year.
The Build to Last in turnaround plan which was launched back in 2015 has been at the centre of the transformation seen by the company. In 2018, gross debt was reduced by over 40%, in which Balfour repaid £231m in convertible bonds.
Most notably, the firm's margin in UK construction hit 2.4%, while US construction reached 1.4% and support services was 5.2%. The group’s cash position also remained strong throughout the year with average net cash up to £194m from £42m previously, while the firm’s order book increased by 11% to £12.6bn.
Quinn, Balfour’s chief executive, said the turnaround now gave the firm the platform to drive profitable managed growth.
“Since the start of Build to Last in 2015, Balfour Beatty has simplified and refocused its operations, embedded new governance, reduced operating expenses by almost 40% and invested steadily in innovation, capability and leadership.
“Balfour Beatty’s transformation has gone beyond resolving the legacy issues of forced growth. The group’s strong competitive positions in large and growing infrastructure markets, and the platform provided by its scalable operating model, provide the ability to deliver profitable managed growth.
“But Balfour Beatty’s transformation goes well beyond resolving the issues of forced growth. We have relentlessly invested in capability and leadership to forge a culture which provides sustainable competitive advantage through standardisation of our systems and processes, on a reducing overhead base.”