The 2022 annual report of Ferrovial Construction (UK) Ltd shows that the company not only made a loss but also saw its order book shrink by 25% and a lot of staff jack in site working for a more comfortable work-life balance.
On revenue up 8% to £493m (2021: £456m), the company made an operating loss of £30.4m (2021: £5.6m profit). Pre-tax loss was £30.1m (2021: £5.4m profit
“This loss has been driven by the recognition of a provision for all the forecasted losses on one contract,” managing director Karl Goose wrote in the annual report. “The losses are isolated to this project, and the underlying causes, notably inflation in the materials and labour markets, do not have a similar impact on the company’s other projects due to the fixed price nature of the contract affected.
“Despite the operating loss, the net cash balance has increased to £213m (2021: £195m). This was due to a combination of effective cash management and the structuring of the company’s contracts, which tends towards cash being received in advance.”
The loss-making contract was not named in the annual accounts but has previously been acknowledged as the Silvertown Tunnel, a 1.4km road tunnel that Ferrovial is building under the Thames in London with Bam Nuttall and South Korea's SK Ecoplant.
Ferrovial Construction (UK) won no new business in 2022 resulting in the order booking shrinking from £1,001m to £795m over the course of the year.
“The company’s broad aim is to grow its secured order book every year,” Mr Goose said. “However, it is selective about the type of work on which it tenders and many of its projects are large scale, so growth is not expected to be consistent.”
The company also reports losing “a significant number of employees” to jobs better able to offer flexible working conditions.
Karl Goose said: “The post-Covid-19 trend of employees looking to work from home (either full-time or for a number of days per week) and/or reduce the length of their commute has continued. With a significant number of the company’s people employed on project sites it is not feasible to accommodate this trend for everyone. Consequently, 2022 has continued to see a significant number of employees leave to move into roles, such as consultancy, with greater opportunity from home.”
Ferrovial Construction (UK) Limited is a subsidiary of Ferrovial Construction Holdings, which has not even posted its 2021 results with Companies House yet.
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