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Mon March 08 2021

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Another margin trim for Skanska UK

18 Jul 14 Skanska UK has reported a strong rise in first-half revenues and profits but has once again seen its margins squeezed a little further.

Mike Putnam has reasons to be cheerful
Mike Putnam has reasons to be cheerful

In the first six months of 2012, Skanska UK made an operating margin of 3.6%. Last year it was down to 3.2%. This year it is 3.1%.

However, it was still a strong first half performance for Skanska UK’s construction business, as it made an operating profit of £19.9m, up 14% on 2103’s first half operating profit of £17.5m. Revenue was up by an even healthier 20% to £651.4m (£12013 H1:£545m).

New orders also grew strongly. In the first six months of 2014, £858.8m of orders were booked by Skanska. This includes the £250m redevelopment of the Worthy Down, Hampshire and Deepcut Surrey barracks for the Ministry of Defence, and Creechurch Place, a new £95m commercial property development in the City of London.

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Skanska UK president and CEO Mike Putnam said: “Our order bookings equate to a book to build ratio of 132%. Any figure greater than 100% is good as it means we are taking in more bookings than revenue. We are in the process of recruiting an additional 1,500 people to fill new roles as a result of this success.”

The outlook for the year as a whole is positive, said Putnam: “We have a very strong pipeline of work, which includes preferred bidder status for Papworth Hospital in Cambridge.”

Projects completed so far in 2014 include the construction of Bath Spa University’s ‘commons’ building, Crossrail’s Western Ticket Hall Box at Bond Street Station, two sections of the M25 and the Alexandra Wing of the Royal London Hospital. In the City of London, Skanska has completed commercial developments Moorgate Exchange and 6 Bevis Marks, as well as the refurbishment of Aldermanbury Square.

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