Chief executive outlines strategy to deal with contractor’s £48m writedown and regime change
Murray Coleman, Bovis Lend Lease’s UK chief executive, this week outlined a two-year recovery strategy for the troubled firm after its British and Europe operations suffered a £40m loss.
The loss was caused by a £48m writedown, announced last month, which in turn was attributed principally to the Manchester joint hospitals PFI scheme and the Bridgewater Place development in Leeds. Coleman revealed that the writedown also included provisions on other projects. He said profit growth would be suppressed for up to two years and that he is looking to recruit staff “from executive level through to unskilled labour” to promote the firm’s recovery.
Lend Lease, Bovis’ Australian parent, this week posted a profit after tax of £68m – a 19% drop on last year’s £83m. The global construction business made a £4.7m loss, largely owing to the UK writedown. Its UK and Europe PFI business made £7.1m profit.
Bob Johnston, Bovis’ global chief executive, implicitly blamed the loss on Jason Millett’s stewardship, claiming that the company had taken on “high-risk projects it didn’t understand”. He said the situation had improved with its new management team.
But in an interview with Building, Millett, Bovis’ former chief executive, accused the company of “reinventing history”. He said: “Bovis’ position today is not just about the last two or three years.”
Coleman appeared to agree with Johnston. He said: “One of the reasons I was brought over last summer was to position the business for the future and develop the level of transparency across operations.”
He added that it would take the company time to work through its problems. He did not rule out a change in the business structure, although he said there were no immediate plans for this.
Coleman would not confirm which projects had contributed to the writedown, although it emerged this week that Bovis’ Manchester Civil Justice Centre project – due to finish in January – is behind schedule.
He revealed that more of the project team from Romford hospital, which was completed last October, were being transferred to the Manchester scheme. Senior project manager Mark Buckle will join operations director Graham Hiley, who was moved across earlier this month.