Thursday 15th March, 2018
Britain's biggest construction firm, Balfour Beatty, has posted a big jump in annual profit as its turnaround continues.
The BBC reported that the company behind Crossrail made a £117m pre-tax profit in 2017, up from just £10m the previous year.
Chief executive Leo Quinn said it had only narrowly avoided the fate of rival Carillion by reforming its business.
Carillion, the construction outsourcing giant, fell into administration in January under under a debt pile of £1.5bn.
Mr Quinn told BBC Radio 4's Today programme: "We had our own near-death experience three years ago - eight profit warnings, £600m cash outflow in nine months from the company.
"These results today demonstrate an amazing transformation and turnaround."
However, Mr Quinn said over the last three years the firm had "upgraded" its leadership and simplified its structure, selling off its Middle Eastern and Indonesian operations.
In its results, the firm suffered a one-off loss of £44m on the Aberdeen Western Peripheral Route project contract as a result of Carillion's liquidation.
Balfour Beatty and its remaining joint venture partner on the project, Galliford Try, are obliged to complete work on the 58km dual carriageway.
However, Mr Quinn said Balfour had also benefited from Carillion's failure, as it had removed a "major competitor from the market that was underpricing us all"Balfour has taken on 150 of Carillion's employees, who had worked with the firm on joint venture projects.
Mr Quinn said he blamed Carillion's collapse on a failure of leadership: "If you are driving the car and not looking at the gauges in front of you, and not understanding what's going on with your petrol and your speedometer, you're not actually doing the job you are paid to do."
He also said the government - a key customer to Carillion - needed to change the way it procured infrastructure projects and should "pre-qualify" suppliers on the quality of their balance sheet.
"There is a real structural issue here. Fundamentally, the government gives very little credence to the quality of your balance sheet," Mr Quinn said.
"You could be bidding against two men and a white van, and it's almost seen as a level playing field.