Contractor’s building arm targets PFI healthcare in five-year plan to increase returns by 90%
Balfour Beatty’s building division has identified the acute hospital market in Northern Ireland as a means of meeting its goal of increasing profit 90% to about £67m over the next five years.
Mike Peasland, Balfour Beatty’s managing director, said: “We’re making a big play in the Northern Ireland market where we see the development of the acute health programme mirroring the rest of the UK.”
The northern division of Balfour Beatty construction is at prequalification stage on the £250m PFI acute hospital in Enniskillen, County Fermanagh. It also plans to bid for an acute scheme in Belfast, which is expected to be tendered in spring next year.
Peasland said that the building division aimed to achieve a £2.2bn turnover in 2010, compared with £1.8bn last year. In 2005 it contributed £35m to operating profit.
Peasland said the construction business was in the top three in education and social housing, and that “these will be the key drivers going forward”. In education, Balfour is bidding for the Islington and Newham Building Schools for the Future (BSF) programmes. In the north it is bidding for BSF schemes in Stoke and Liverpool, and three weeks ago it was appointed to a six-member national framework for a £1.6bn schools academy.
Mansell, the biggest part of Balfour’s building division, operates as a regional contractor. It is looking to acquire a business in Kent and then in the south Midlands to expand. Since it was acquired by Balfour in 2003 turnover has grown from £500m and is expected to hit £700m this year. The biggest part of the business is affordable housing.
It is part of the BAA framework for Heathrow and Gatwick airports. It is also looking at plans to develop the first Yotels, run by Simon Woodroffe, founder of Yo! Sushi.
Defence is also a big sector for Mansell, and projects include the £127m redevelopment of accommodation at RAF Lakenheath. in Suffolk.
A report by Deloitte said that Balfour Beatty had gone from strength to strength and remained the UK’s biggest contractor because of a successful domestic strategy as well as good overseas investments, particularly in the railway market. It had a £4.9bn turnover last year. In a survey of the top 100 biggest construction companies in Europe, Deloitte said that the UK did not feature in the top 10 but dominated the top 100.
Balfour’s building arm
Turnover (2005) £1.5bn
Turnover forecast (2010) £2.2bn
Operating profit (2005) £35m
Operating profit forecast (2010) £67m
Number of staff 4619
Mansell’s turnover £700m
Mansell staff 1655