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Thu February 27 2020

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Skanska UK profits shrink 9%

6 Feb 17 Skanska UK’s construction business saw its profits fall for a fourth consecutive year in 2016 and its operating margin continue to erode.

Skanska UK president and CEO Mike Putnam
Skanska UK president and CEO Mike Putnam

Skanska UK made an operating profit of £35.1m in 2016, down 9% on 2015, on revenues up 17% at £1,678m.

This equates to an operating margin of 2.1% – a figure that has been coming down steadily in recent years. It was 3.7% in 2012.

Skanska UK president and CEO Mike Putnam said: “I am pleased to report a 17% per cent increase in revenue for 2016. Operating margin is still firmly in the top tier of the sector, despite a small decline as the result of a challenging business environment.”

SKANSKA UK

2016

2015

2014

2013

2012

Revenue

£1,678m

£1,430m

£1,340.5m

£1,216.3m

£1,166m

Operating profit

£35.1m

£38.4m

£40.0m

£41.9m

£42.6m

Contract highlights during 2016 included being chosen by Highways England to deliver the A14 Cambridge to Huntingdon road improvement scheme, worth £290m, and a £245m seven-year road maintenance contract for Devon County Council. It also won a £165m contract to improve Waterloo Station and a £60m contract with Great Ormond Street Hospital to build the Zayed Centre for Research into Rare Disease in Children.

“A ‘book-to-build’ ratio of 107% is an increase on what we reported this time last year and our full pipeline of work for this year, including the full value of frameworks, is very healthy,” said Mr Putnam. “This clearly indicates a solid basis on which to build in 2017 and beyond.”

Skanska also takes corporate social responsibility seriously. “It is equally important to us that we deliver these results in a responsible way. Last year, we made good progress in all of our sustainability areas of health and safety, ethics, green, diversity and inclusion and corporate community investment,” Mike Putnam added. “We are focused on creating a more diverse and inclusive Skanska – with more diverse candidates on our shortlists. I am delighted that 35% of the people recruited last year were women. We are slowly but surely shifting the dials on diversity.”

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