Skanska UK’s profit and revenue remain flat, but firm’s boss says business is now set for a period of growth and expansion
Skanska UK’s profit and revenue remained flat last year, but the firm is now targeting growth as the construction industry and the wider economy bounce back from recession.
In a snapshot of the firm’s results for the year to 31 December 2013, published this week, Skanska said operating profit for its UK construction business dipped slightly to £41.9m, down from £42.6m the previous year.
The firm said its UK revenue rose marginally to £1.2bn, up from £1.16bn in 2012, giving the UK construction business an operating margin of 3.4%, down 0.2 percentage points from 2012.
Skanska operates as part of the wider Skanska global construction group, which reported revenue of £12.9bn – up 3% on the previous year -and operating profit of £486m, up 12% on the previous year.
Skanska’s UK is the fourth-largest country business of the Swedish-based giant, by revenue, after the US, Sweden, and Norway.
The firm said its UK business secured £1bn of new work in 2013, including the £54m Bond Street Crossrail station, as well as the £103m 1 and 2 Ludgate office development for Land Securities (pictured).
Speaking to Building, UK president and chief executive Mike Putnam (pictured) said having “weathered the storm” the firm was now ready for a period of “planned expansion”, with the firm targeting growth across all its key sectors, particularly energy and infrastructure.
He said the acquisition of Atkins’ highways services business last year would help the firm win a greater share of the roads market, which is set to see a major increase in investment.
“The recession is now in the rear view mirror … but the industry is still dealing with some of its aftermath. But because there is more confidence around there are more project starts,” he said.
“There is a significant amount of work at preferred bidder status and that is going to lead to growth over the coming years.”
He said the firm was also targeting more work in London, where it has had some high profile successes over the past year, including the £177m 1 New Street office scheme, also for Land Securities, and the £500m Scalpel tower in the city of London, for US insurance firm W.R Berkley.
“We’re very pleased with those wins but we regard it as business as usual and not out of the norm,” he said.
“We’re still actively looking for more as we’re nowhere near full up yet.”
Last year Skanska abandoned its ambition to become one of the UK’s top housebuilders after it announced it would close its fledgling housing development division.
Putnam said the firm was now in the process of selling off parcels of land attached to the business, with the sales expected to be completed this year. “With the way the housing market it is there has been strong interest shown,” he said.
He said housing would remain a “very small” part of Skanska’s overall project portfolio: “We will be very selective going forward – it will be part of the armoury part a small part.”