Leo Quinn says troubled contractor is on track to return to 2-3% margins
Balfour Beatty boss Leo Quinn has said the troubled contractor’s turnaround programme is on track.
In a trading update this morning, the firm said it was on course to meet its “self-help targets” of getting £200m cash in, £100m cost out and having a positive net cash position by the end of 2016.
Quinn said he was also “confident” the firm - which has reported a string of losses in recent years - will hit industry-standard profit margins within two years. He has previously indicated this means margins of 2-3%.
The firm said the first phase of its cost-cutting programme Build to Last was nearing completion, saying: “The business has been simplified and the leadership team strengthened; governance and processes are in place to drive greater transparency and control.”
The firm added: “Management of legacy issues across the portfolio is proceeding to timetable and remains in line with overall expectations.
“Looking to the future, Balfour Beatty continues to win landmark contracts across its chosen markets on terms which reflect the Group’s improved governance and controls and its order book has remained stable during the second half of 2016.”
Quinn added: “The actions that we have taken during the first two years of Build to Last have been necessary to lay a solid foundation for long term profitable growth.
“Our people have responded to this challenge with passion and commitment. I am confident that the next 24 months of Build to Last will see the Group achieving industry-standard margins”.