Contractor margin slides to 2.1% but revenue hits £1.7bn

Skanska grew its UK business by almost a fifth last year, but suffered another dip in profit due to “challenging” market conditions.

In the 2016 calendar year, Skanska posted operating profit of £35.1m on revenue of £1.7bn, down from £36.3m profit on revenue of £1.5bn the previous year.

The profit slide equated to a dip in operating margin to 2.1%, down from 2.4%. Two years ago the firm’s margin was 3%.

During 2016 Skanska UK booked orders worth £1.8bn.

Mike Putnam (pcitured), president and chief executive of Skanska UK, said: “Operating margin is still firmly in the top tier of the sector, despite a small decline as the result of a challenging business environment.”

Commenting on contracts won over the year - including a HS2 enabling works deal and the £45m Copyright Building office project for client Derwent in London, Putnam said: “These successes demonstrate very clearly the breadth of our portfolio across public, regulated and private sectors.

“This provides our business with both diversity and resilience in a highly competitive market and in the face of the uncertainty created by the EU referendum last June.”