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Skanska UK releases strong set of end of year results

Skanska UK has released another set of strong results, despite the difficult economic backdrop.

Skanska UK saw profits and margins increase in 2012 as its order book rose almost 23 per cent, it announced today.

Operating profit rose 4.2 per cent to £42.1m from £40.4m, with operating margins up from 3.3 per cent to 3.6 per cent.

Orders rose 23 per cent from £878m to £1.08bn, while the order backlog was down 5 per cent from £1.89bn to £1.8bn.

It said 2012 ended on a particularly high note, with Skanska UK winning more than £1bn of new work in December alone.

Mike Putnam, president and chief executive of Skanska UK, said the results show the contractor’s drive to maintain a consistent performance, despite the economic backdrop.

“This is evidence of the robust focus we maintain on managing our operations and risks across Skanska UK. Revenue for the year was in line with our expectations, and I am pleased that we have delivered an increase in operating margin to 3.6 per cent.

“I am particularly delighted to see the significant increase in our order backlog towards the end of last year, despite the current recession in the construction market and the limited number of public-sector projects.

“We will, however, continue to be discerning about the choice of future projects and investments we take on, always focusing on meeting the expectations of our clients and shareholders.”

Skanska UK booked £433m of the December work for 2012, with the remaining £630 million being booked in the following years.

Those wins included an £1.6bn Gas Distribution Strategic Partnership contract with National Grid, in 50/50 joint venture with Morrison Utility Services, and a £320m contract with the Highways Agency for the later upgraded sections of the M25, in 50/50 joint venture with Balfour Beatty.

Mr Putnam said: “This is the fourth consecutive year of strong results for Skanska UK, during which time we have consistently achieved or exceeded the operating income in our 2015 business plan.

“In 2012, we also made good progress in our strategic profitable growth areas. We launched our residential homes offering, purchased land for commercialdevelopment and signed a joint-venture agreement to deliver concrete gravity foundations for offshore wind turbines. In addition, we were named as one of 13companies on the Mayor of London’s RE:FIT framework to improve the energyefficiency of public buildings in the capital.”

Key achievements:

The year saw Skanska enter the waste to energy market as a Skanska AECOM joint venture was named the preferred bidder for a public private partnership venture, financing, designing and building a residual waste treatment facility for Bradford and Calderdale.

Skanska UK said it played a key role in preparations for the London 2012 Olympic and Paralympic Games, delivering projects worth about £500million in total.

Skanska’s first homes went on sale at Seven Acres in Cambridge.

The company also made its first land acquisitions fo r commercial development.

Last year, Skanska was the founding member of the Supply Chain Sustainability School, a free online learning environment to enhance the green credentials of the supply chain.

Skanska Group

The Swedish group’s construction revenues rose 8 per cent to £12.5bn.

Order bookings amounted to £12bn (2011: £12.4bn) and the order backlog to £14.8bn (£15.7bn).

Operating income amounted to £460m. The operating margin in construction was 2.8 percent (3 per cent).

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