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Sat June 19 2021

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Skanska margins squeezed in first quarter

7 May 13 Skanska UK has seen its operating margins slide below 3% for the first quarter of 2013, down from 3.6% for 2012.

President and CEO Mike Putnam
President and CEO Mike Putnam

However, president and CEO Mike Putnam said that it was still a “very credible performance given the prolonged recession facing the construction industry”.

He added: “We are well on track to achieve our financial targets for the year.”

Skanska UK’s full year revenue in 2012 was £1.17bn, down 4.5% on 2011. Revenue for the first quarter of 2013 was nearly £260m and operating income was £7.5m.

“Although our reported order bookings for the first quarter of almost £170m are behind expectations, we have a healthy pipeline of future opportunities,” Mr Puttnam said.

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Skanska announced its acquisition of Atkins Highways Services in February, which is expected to complete by the end of the second quarter and will boost its workforce by 1,250 people.

Also in the quarter, the company scored its seventh contract win on the Crossrail project, working with Costain to deliver the £110m station at Bond Street. Other major contract wins include 100 Cheapside, an 18-month contract to demolish and construct a 10-storey commercial building in the City of London.

Further highlights of the period include the start of work on the £1.6bn gas infrastructure replacement project for National Grid, working in joint venture with Morrison Utility Services. “This involved the mobilisation of more than 3,000 people within a matter of weeks. We are now up and running, delivering works in the east of England and north London,” said Mr Putnam.

Skanska also started work with Balfour Beatty on a £321m upgrade of sections of the M25 at the start of the year, to make it a so-called “managed motorway” with hard shoulder running and variable speed limit signs.

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