Build UK payment performance table reveals the good, the bad and the ugly

Interserve paid only 17% of its invoices on agreed terms in the six months to 30 July 2018, according to a new table from Build UK which reveals the payment performance of some of the country’s largest construction firms and clients.

As well as reporting 83% of invoices not being paid within the agreed time, the contractor, currently bogged down with a delayed hotel and residential scheme in London’s West End, took an average of 50 days to pay it suppliers.

Cenkos analyst Kevin Cammack said: “Is it really any surprise when Interserve has pretty much the most stretched balance sheet in the quoted sector today?”

In a statement Interserve said: “We are committed to improving our performance and are currently working in partnership with our construction supply chain to ensure this improvement is realised, part of which is the closure of disputed invoices. 

“We have a strong and loyal supply chain who we continue to work with collaboratively achieving many great outcomes for our customers.”

Build UK’s table of its member firms, featuring data designed to comply with government legislation requiring large firms to report on their payment practices every six months, showed a wide range of payment performance.

Invoices Finance shutterstock

Clients were the most prompt payers, with British Land ahead of the pack on 14 days, followed by Landsec (19 days) and Heathrow (21 days).

The best performing contractor was Scunthorpe-based Clugston, paying its invoices on average within 32 days, while at the other end of the table specialist demolition group Brown & Mason took 103 days.

Build UK said its data was “providing a clear and comprehensive picture of payment across the construction supply chain and the increased level of transparency is the first step towards improving payment performance”.

Jo Fautley, Build UK’s deputy chief executive, said: “The industry now has access to information on how a range of companies are paying their supply chains which can be used to make more informed decisions about who to work with.

“Changing payment practices that have been embedded within the industry for many years will take time but this issue is now firmly in the spotlight and we have a clear benchmark to measure progress.”

Build UK said the majority of its members would report for a second time at the end January 2019, “which will provide an early indication of whether payment practices are improving”.

There have been numerous calls for the rules governing payments to be tightened up. The Association of Accounting Technicians recently urged that the government’s Prompt Payment Code be made compulsory for companies with more than 250 staff and that payment terms should be halved to 30 days.

The AAT also recommended setting up a financial penalty regime, enforced by the small business commissioner, for persistent late payers.

 BUILD UK MEMBERS’ PAYMENT PERFORMANCE

Member Type

Company Name

Percentage (%) of Invoices not paid within agreed terms

Average Time Taken to Pay Invoices (Days)

Date of Duty to Report Submission

Specialist - Concrete

Getjar

0

45

21/09/2018

Specialist - Concrete

Byrne Brothers

0

55

02/07/2018

Contractor

Engie

1

61

04/07/2018

Specialist - Ground Engineering

Cementation Skanska

4

43

17/07/2018

Specialist - Steel

Billington

4

49

26/07/2018

Client

Heathrow

6

21

30/07/2018

Contractor

Seddon

7

44

19/07/2018

Client

Landsec

8

19

16/10/2018

Contractor

Willmott Dixon

8

33

20/07/2018

Contractor

Canary Wharf Contractors

8

34

24/07/2018

Specialist - Concrete

AJ Morrisroe and Sons

8

38

15/05/2018

Specialist - Demolition

Erith

8

39

31/10/2018

Client

British Land

9

14

30/10/2018

Client

Berkeley Homes

9

24

30/05/2018

Contractor

Skanska

11

41

13/07/2018

Specialist - Demolition

Keltbray

11

47

01/06/2018

Contractor

Clugston

13

32

16/08/2018

Specialist - Ground Engineering

Keller

15

33

16/07/2018

Specialist - Demolition

McGee Group

16

47

29/06/2018

Specialist - Steel

Severfield

17

46

23/10/2018

Contractor

VolkerWessels

19

35

26/07/2018

Contractor

Morgan Sindall

24

44

27/07/2018

Specialist - Concrete

Tamdown

24

62

26/10/2018

Specialist - Concrete

Carey Group

25

36

30/10/2018

Contractor

Galliford Try

26

47

26/07/2018

Specialist - Concrete

Expanded Structures

28

61

28/10/2018

Specialist - Steel

William Hare

29

51

30/07/2018

Contractor

Bouygues

31

40

26/07/2018

Contractor

Vinci

36

52

25/07/2018

Contractor

Osborne

38

47

26/10/2018

Contractor

Mace

43

45

26/07/2018

Contractor

AECOM

44

38

31/10/2018

Contractor

Multiplex

47

43

26/07/2018

Contractor

ISG

48

42

17/07/2018

Contractor

Kier

48

54

30/07/2018

Contractor

BAM Construct

49

45

26/07/2018

Contractor

Balfour Beatty

54

54

27/07/2018

Professional Service

Arup

60

32

29/10/2018

Contractor

Wates

62

44

27/07/2018

Contractor

John Sisk & Son

64

52

24/07/2018

Contractor

Murphy Group

66

66

24/07/2018

Specialist - Demolition

Brown and Mason

66

103

31/05/2018

Contractor

Sir Robert McAlpine

70

49

04/06/2018

Client

Great Portland Estates

73

46

29/10/2018

Professional Service

RLB

76

44

22/05/2018

Contractor

Interserve

83

50

30/07/2018

 Source: Build UK