Construction sector reveals poor 2009 results
Lacklustre year-end results across the construction sector were reported this week. Pre-tax profit at construction giant Morgan Sindall slumped 28 per cent while turnover slipped 13% to £2.2bn. Kier was able to report steady turnover of around £1bn, but its pre-tax profit fell by 47% to £16.7m.
Hybrid housebuilder and contractor Galliford Try posted a small pre-tax profit of £6.4m, but turnover dropped £774m in 2008 to £570m last year. Housebuilder Barratt Developments saw turnover fall from £1.2bn in 2008 to £872.4m last year, combined with a pre-tax loss of £178.4m compared to the £594.5m it lost in 2008.
Building reported that pre-tax profit at Morgan Sindall fell by nearly a third after revenues at its fit out and urban regeneration divisions collapsed. Pre-tax profit for 2009 was £44.7m, down 28% on the £62.3m recorded in 2008.
Turnover fell at all Morgan Sindall divisions, but the dramatic drop was in the fit out and regeneration businesses. Turnover for the fit-out business fell by 39% to £291m, with profits of £13.8m down 47% on 2008 while profits at the urban regeneration business, Muse, were down by 90% to just £0.7m, after revenues fell 62% to £32m.
However, affordable housing turnover remained broadly stable at £374m (2008: £377m) while Morgan Est, the firm’s infrastructure business, was the only division to increase profits, up 19% to £17.1m on turnover of £770m.
Construction News reported an 18 per cent fall in turnover at mid-tier contractor PC Harrington. Pre-tax profit was down £1 million at £11.7 million while turnover stood at £171 million, 18% less compared to £202 million the previous year.
PC Harrington Contractors, the concrete contracting arm of the group, accounted for the majority of the fall in turnover, and pre-tax profit in the division also fell from £7.5m to £4.6m. The group trim its wage bill by just under 10 per cent – from £26m to £23.5m – after making redundancies and ordering pay cuts.
Meanwhile, Construction News reported that the Royal Bam Group NV, parent of the UK’s £1.75bn Bam Construct and Bam Nuttall businesses, issued a profits warning ahead of releasing its financial results on March 4th.
It said that profits were expected to be about £26 million compared to previous forecasts of £88m, blamed on the group’s Dutch housing division, which has suffered from significant writedowns similar to those borne by UK house builders.