Balfour Beatty has accomplished £100m in cost cuts during the first phase of its Build to Last transformation programme, it said in a trading update today.
The first phase of the Build to Last transformation programme is now nearing completion and has delivered fundamental change to the group – including a strengthened leadership team and governance and processes put place to drive greater transparency and control, the statement said.
Leo Quinn: solid foundation
“By year end, the group expects to deliver its phase one self-help targets of £200m cash in, £100m cost out and also to have a positive net cash balance,” it added.
Management of problem legacy contracts “is proceeding to timetable and remains in line with overall expectations”.
Group chief executive Leo Quinn took over in January 2015 following a run of profit warnings caused by problem contracts, which saw Balfour rack up a £199m loss in 2015.
Quinn said: “The actions that we have taken during the first two years of Build to Last have been necessary to lay a solid foundation for long-term profitable growth.
“Our people have responded to this challenge with passion and commitment.
“I am confident that the next 24 months of Build to Last will see the group achieving industry-standard margins.”
Balfour has cut more than 800 backroom staff during the first two years of the programme. Most recently it abolished its central BIM group and made the individual businesses responsible for their own BIM costs and investment.
Full results for 2016 are due to be announced next March.
