Vinci profits sliced in half as building division makes a loss
Vinci UK profits cut in half a year after they were doubled - contractor plans to hire 400 workers in 2012 and “tighten” its sub contractor management structure.
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Vinci Plc Group saw pre tax profits tumble from £39 million to £19.8m in the year to December 31 2011, with its building division making a loss.
Turnover was up 8 per cent at the UK arm of the French contractor, from £1.02bn to £1.11bn.
It saw a £1.56m pre tax loss in its building division - compared with £13m profit in 2010 - while revenue increased from £545m to £588m. That division was restructured in 2011, with a focus on south England and the consolidation of Building South into three “streamlined” areas; London, major projects and South East.
Building East was created, as was Vinci Commercial Office fit-out in anticipation of an upturn in commercial as leases come to an end in 2013-14. The air business – which includes Gatwick and BAA contracts - was moved into the building division.
The aim for building in 2012 is to increase average project sizes from under £5m to £10m, with a priority on frameworks.
Taylor Woodrow civil engineering saw a £12m pre tax profit (2010: £21.7m) as revenue increased by 15 per cent from £179m to £206m, mainly on the back of its King’s Cross contracts. It is also in joint venture with Balfour Beatty on the Hinkley Point C nuclear bid.
Facilities revenue increased from £220m to £226m, with pre tax profit of £6.24m (2010: £5m).
Chief executive John Stanion said the firm won £1.3bn of orders, demonstrating that the “business development strategy is working, our market presence has increased and familiarity with the brand has improved”.
He said: “In 2011, the Vinci Plc Group performed well against a backdrop of a shrinking UK construction sector.”
The contractor is predicting 11 per cent growth in 2012 and will look to recruit over 400 people.
The three divisions - building, civils and facilities - are also supported by a technology centre, focused on internal efficiencies. It plans to “tighten” its supply chain management structure, after spending £816m across 5,536 sub contractors in 2011, and improve its internal BIM capacity.
There was £1.4m of redundancy and restructuring costs in 2011 (down from £1.6m in 2010), with average employee numbers flat at just over 4,000.
The company also has £105m cash in the bank, with a record order book of £2.25bn.