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New focus restores Skanska profit
16:45 07 Apr 2005
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Skanska UK's major sort out has dramatically restored the
construction group's profitability. After running into the red as a
result of £22m of one-off restructuring costs in the previous
year, Skanska logged a pre-tax profit of £24m in 2004 from its
on-going operations.
Chief executive David Fison introduced major changes after taking over the helm from Keith Clarke. "During 2004, we sorted out our past," Fison said. "Now it's about delivering the future. Our core UK business is getting better and better in delivering integrated projects across the infrastructure sector."
Fison said 2005 would prove that the new strategy is working "in performance and profit".
"I'm a lot more bullish today," he continued. "We've spent time getting rid of overseas activities and getting the company working better on integrated projects. I inherited 11 divisions in the UK and have now transformed them into three business streams. It was a crucial move in allowing us to deliver the Skanska solution; if the parts don't integrate you're not much more than a bunch of trade contractors."
Financial results (12 months to 31 December) show turnover from on-going activities running to £800m. One of the sales was Skanska Whessoe, a specialist liquid natural gas business. Sold in June 2004, it took a £51m hit on a project in Kent. Skanska UK found itself carrying 35% of this burden.
With Skanska UK's internal fiefdoms now unravelled, Fison is confident that operating margins can rise further. Last year's figure climbed to 2.8% and he aims to hit 3.2% this time round. "Our aspirations after that are to go higher again," Fison said.
During 2004, Skanska completed the King's College PFI hospital 10 weeks ahead of schedule. In Nottinghamshire, Skanska was named preferred bidder for the £265m, 30-year PFI Sherwood Forest and Mansfield hospitals.
Skanska's civil engineering business was awarded a £150m Alliance contract by Anglian Water and its utilities business benefited from the renewal of BT framework agreements covering the Yorkshire & Humberside and Thames Valley regions. The four-year deals are worth £200m.
Skanska UK has an order book worth £1bn. "We don't include schemes at preferred bidder stage in that figure," said Fison. "They only come in when we reach financial close and there's another £1.3bn-worth of business at that stage."
Skanska results
(12 months to 31/12/04)? 2004 2003?Pre-tax profit/loss £24m* £1m?Turnover £800m* £1.1bn?* on-going activities
Chief executive David Fison introduced major changes after taking over the helm from Keith Clarke. "During 2004, we sorted out our past," Fison said. "Now it's about delivering the future. Our core UK business is getting better and better in delivering integrated projects across the infrastructure sector."
Fison said 2005 would prove that the new strategy is working "in performance and profit".
"I'm a lot more bullish today," he continued. "We've spent time getting rid of overseas activities and getting the company working better on integrated projects. I inherited 11 divisions in the UK and have now transformed them into three business streams. It was a crucial move in allowing us to deliver the Skanska solution; if the parts don't integrate you're not much more than a bunch of trade contractors."
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Financial results (12 months to 31 December) show turnover from on-going activities running to £800m. One of the sales was Skanska Whessoe, a specialist liquid natural gas business. Sold in June 2004, it took a £51m hit on a project in Kent. Skanska UK found itself carrying 35% of this burden.
With Skanska UK's internal fiefdoms now unravelled, Fison is confident that operating margins can rise further. Last year's figure climbed to 2.8% and he aims to hit 3.2% this time round. "Our aspirations after that are to go higher again," Fison said.
During 2004, Skanska completed the King's College PFI hospital 10 weeks ahead of schedule. In Nottinghamshire, Skanska was named preferred bidder for the £265m, 30-year PFI Sherwood Forest and Mansfield hospitals.
Skanska's civil engineering business was awarded a £150m Alliance contract by Anglian Water and its utilities business benefited from the renewal of BT framework agreements covering the Yorkshire & Humberside and Thames Valley regions. The four-year deals are worth £200m.
Skanska UK has an order book worth £1bn. "We don't include schemes at preferred bidder stage in that figure," said Fison. "They only come in when we reach financial close and there's another £1.3bn-worth of business at that stage."
Skanska results
(12 months to 31/12/04)? 2004 2003?Pre-tax profit/loss £24m* £1m?Turnover £800m* £1.1bn?* on-going activities
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