‘UK difficulties’ blamed as year-on-year figures almost halve
Profit at Vinci Construction dropped by almost half over the 2014 calendar year, the firm’s annual report has revealed.
Vinci blamed the 44% fall in construction profit - measured as earnings before interest and tax - from €680m (£505m) in 2013 to €380m (£282m) last year, partly on “UK difficulties” and a deteriorating French market.
Vinci Construction’s revenue also fell 8.1% from €16.8bn (£12.5bn) in 2013 to €15.4bn (£11.4bn) last year.
The Vinci group as a whole posted marginal declines in revenue and profit over 2014, with revenue down 2% from €40.4bn (£30bn) to €38.7bn (£28.7bn), while profit before interest and tax declined 0.8% from €3.7m (£2.8m) to €3.6m (£2.7m).
The “UK difficulties” Vinci alluded to in its construction business are likely to include costs incurred from delays on the firm’s £570m Nottingham tram project.
In a presentation to investors accompanying Vinci’s 2014 report, the firm said: “Vinci’s overall performance in 2014 was robust: the continued upturn in motorway traffic, the sharp increase in airport traffic and the good momentum in the group’s activities outside Europe allowed the group to reduce the impacts of the deterioration in the French economic environment that affected the contracting business from the second quarter as well as the difficulties in UK construction activities.”
Vinci Construction’s UK civil engineering arm Taylor Woodrow confirmed to Building in November that the Nottingham project was the one “mainly” reponsible for losses at Vinci Construction UK in the first half of 2014.
In these half-year results to the end of June 2014, published in July, Vinci said: “There were significant losses at Vinci Construction UK. They were mainly due to one project that proved more difficult than expected, leading to overspending and delays, and sufficient compensation for [this]has not been obtained at this stage.”
Earlier this month Vinci’s stadium operations arm Vinci Stadium landed a prestigious contract to manage and operate London’s former Olympic stadium for a period of 25 years.
The stadium - which is currently being converted into a multi-use venue by Balfour Beatty - will host five matches of the Rugby World Cup 2015, before fully re-opening in 2016 as the home ground of West Ham United and the national competition venue for UK Athletics.